$113-million net inflow of hot money recorded in September

The country’s foreign portfolio investments improved in September with $113-million net inflows but year-to-date, still recorded net outflows of $206 million, based on Bangko Sentral ng Pilipinas (BSP) data.

The monthly hot money or speculative money reversed the August, 2017’s net outflows of $58 million and the same time last year’s $807-million withdrawals.

The nine-month foreign portfolio net outflows, however, were in contrast to the $1.3 billion net inflows recorded in the January-September period last year.

The BSP said the end-September outflows were because of domestic and international developments such as the US Federal Reserve’s interest rate actions, global terrorist attacks, North Korea’s nuclear missile testing and the closure order for several mining companies in the country earlier in the year.

According to the BSP statement, for the month of September, registered hot money was at $1.3 billion, 38.5 percent higher year-on-year or from $936 million and 1.8 percent more than $1.27 billion of the previous month.

“This may be attributed to investor reaction to the extension of the debt limit deadline in the US, and the Philippine Senate’s approval of the first package of the government’s tax reform program,” said BSP.

Outflows increased by 19.1 percent to $1.2 billion monthon-month but while still in outflows year-to-date, it was down by 43.1 percent to $994 million compared to $2.1 billion outflows same period in 2016.

Bulk of hot money inflows or 80.9 percent went to the Philippine Stock Exchange, mostly investments in holding firms, property companies, banks, casinos and gaming firms, food, beverage and tobacco companies. About 18.7 percent were in peso government securities, the rest are in peso time deposits (PTDs).