Hot money inf lows rebound in Feb, up 137.6% to $613M

T HE country’s portfolio investments more than doubled as hot money inflows rebounded in February, according to the latest data from the Bangko Sentral ng Pilipinas (BSP).

e data from the BSP showed foreign investments registered with the BSP, through authorized agent banks, yielded net inflows of $613 million as of February 2024.

is represented a growth of 137.6 percent from the $258 million net outflows in the period of January to February last year.

“ese investments refer to the following inward foreign investments registered with authorized agent banks [such as] Pse-listed securities; Peso-denominated government securities; Peso time deposits with banks with minimum tenor of 90 days; other Peso debt instruments; unit investment trust funds; and other instruments such as Exchange Traded Funds and Philippine Depositary Receipts,” BSP said.

In February 2024 alone, BSP data showed hot money net inflows reached $689 million, a 179.69-percent increase from the contraction of $549.28 million in the same period in 2023.

BSP said this led to the $1.5 billion-worth gross inflows and $859 million gross outflow for the month. is is a reversal from the $76 million net outflows recorded in January 2024.

e gross inflows of $1.5 billion in February is higher by $313 million or by 25.3 percent compared to the $1.2 billion recorded in January 2024.

In February, BSP said 61.4 percent of registered investments were in Peso government securities amounting to $951 million; the remaining 38.6 percent or $598 million were in Pse-listed securities.

Most of these “were investments made in banks; transportation services; holding firms; property; and food, beverage and tobacco," BSP said.

“Investments for the month mostly came from the United Kingdom, Singapore, United States [US], Luxembourg, and Hongkong with combined share to total at 89.1 percent,” it added.

Meanwhile, the $859-million gross outflows for the month were lower by $452 million or by 34.5 percent compared to the gross outflows recorded for January 2024 at $1.3 billion.

BSP said the US remains to be the top destination of outflows, receiving $485 million or 56.4 percent of total outward remittances.

e central bank said registration of inward foreign investments delegated to authorized agent banks by the BSP is optional under the rules on foreign exchange (FX) transactions.

It is required only if the investor or its representative will purchase FX from authorized agent banks and/or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of earnings that accrue on the registered investment.

Without such registration, the foreign investor can still repatriate capital and remit earnings on its investment but the FX will have to be sourced outside the banking system.