April sees ‘hot money’ flowing in anew

NET inflows of foreign portfolio investments — also known as “hot money” for the ease by which they enter and leave the economy on any development that changes investor appetite — grew more than fivefold in April from a year ago as inflows edged up and outflows fell by more than a 10^th in those comparative periods, according to data Bangko Sentral ng Pilipinas (BSP) released on Friday.
Such funds recorded a $279.28-million net inflow in April, over five times more than the $51.49 million recorded a year ago, but were just a fourth of March’s $1.132-billion net inflow.
About 82.2% of April investments went to Philippine Stock Exchange-listed securities — mainly banks, holding firms, property companies, food, beverage and tobacco firms, and retail companies — while the balance went to peso-denominated government securities, the BSP said in a statement.
In a telephone interview, Security Bank Corp. economist Angelo B. Taningco attributed the 75% month-on-month drop in net inflows in April “to a high base since March recorded huge inflows of $1.25 billion in ‘other peso-denominated debt instruments’.”
BSP data showed that foreigners brought in a total of $1.376 billion, 4.23% more than the year-ago $1.32 billion a year ago, but 44% less than March’s $2.469 billion; and took out $1.097 billion, lower by 13.6% from April 2017’s $1.269 billion 18% from March’s $1.337 billion.
The United Kingdom, United States, Hong Kong, Singapore and Luxembourg were the top fund sources last month with a combined share of 76.6%, while 74.5% of April’s outflows went back to the US.
The BSP expects $900 million in net hot money outflows this year, more than four times the $205.03 million that actually left the Philippines in 2017. — Elijah Joseph C. Tubayan