Hot money reverts to net inflow in Nov

The Bangko Sentral ng Pilipinas (BSP) registered total net hot money inflows of $108 million in November, reversing October’s net outflows of $563 million.

The latest foreign portfolio investment is also better than same time last year of $607 million net outflows.

“This may be attributed to positive investor reaction to: news of favorable third-quarter corporate earnings; outcome of and pronouncements during the recently concluded 31st Asean Summit; and the Senate’s approval of a higher personal income tax exemption of R250,000 annually, as part of the Senate version of the government’s tax reform program,” explained the BSP.

In November, the central bank’s gross registration of inflows amounted to $1.1 billion, 5.2 percent lower compared to same time last year.

In a statement over the weekend, the BSP said 80.8 percent of hot money were invested in listed securities such as holding firms, banks, food, beverage and tobacco companies, property companies, and utilities firms.

The rest of 19.2 percent were in peso government securities whose transactions yielded net inflows of $213 million.

The BSP said transactions for the following instruments resulted in net outflows or $105 million for listed securities and less than $1 million for other debt instruments.

The US, the United Kingdom, Singapore, Norway, and Luxembourg were the top five investor countries in November with combined share of 73.5 percent, according to the BSP.

Data shows November had gross outflows of $1 billion which was lower by 47.6 percent and 43.2 percent than the $1.9 billion and $1.8 billion recorded in October 2017 and November 2016, respectively.

The US continued to be the main destination of outflows, receiving 90.3 percent of total remittances, said the BSP. For the first 11 months of the year, hot money net transactions were in the negative or outflows of $635 million, compared to $673 million net inflows same period in 2016.