After four months of hot money outflows, the Bangko Sentral ng Pilipinas (BSP) finally registered net foreign investment inflows albeit a modest $1.23 million for the month of June.
The June performance was a reversal from the net outflows posted in May of $124.49 million and the $342.19 million in June last year.
Foreign investments registered with the BSP, formerly called foreign portfolio investments or hot money, are monitored via the authorized agent banks (AABs).
For the first six months of 2023, foreign investments through AABs amounted to $803.33 million net outflows, reversing the $778 million net inflows same period in 2022 as investors, mostly in the stock market, are still taking out gains than investing for the short-term.
For the month of June only, gross inflows totaled $889.44 million while gross outflows amounted to $888.21 million.
Year-to-date, gross inflows reached $5.38 billion while gross outflows totaled $6.19 billion as of end-June.
The BSP said Thursday, July 27, that 78.7 percent of registered investments or $700 million were in listed securities in the Philippine Stock Exchange. These funds were invested in the following sectors: property; banks; holding firms; food, beverage and tobacco; and telecommunications.
The other 21.3 percent or $190 million were invested in peso-denominated government securities.
For the month of June, the top five investor countries were the United Kingdom, the US, Luxembourg, Singapore, and Switzerland. These countries have a combined share to total of 84.2 percent.
It is optional for AABs to register inward foreign investments with the BSP. It is required only if the investor or its representative will purchase foreign currency from AABs or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of earnings that accrue on the registered investment, said the BSP.
For 2023, the BSP forecasts net foreign investments of $2.5 billion. Next year, the estimate is $3.5 billion.
Last year, the BSP registered $886.70 million net hot money inflows. This was lower than the projected $3.5 billion for 2022.
Hot money investments are inward foreign investments registered with AABs. These are invested not just in PSE-listed securities and government securities, but also in peso-denominated time deposits with banks with minimum tenor of 90 days, and other debt instruments. It can also be channeled in unit investment trust funds and other instruments such as Exchange Traded Funds and Philippine Depositary Receipts.