Nearly $98M in ‘hot money’ enters PH in Jan
NET foreign portfolio investments worth almost $98 million entered the country in the first month of 2021, the Bangko Sentral ng Pilipinas (BSP) reported on Friday, citing recent political events in the United States and Covid-19-related developments as among the reasons.
Central bank data showed that net inflows of these investments, or “hot money” — so called because of how easily these go in and out of the economy — reached $97.92 million in January, a turnaround of December’s $523.86-million net outflows.
The latest amount — the biggest since November’s $226.75-million inflows, but still lower than the year-earlier’s $486.10 million — resulted from $951.61 million in inflows and $853.70 million in outflows.
“The $952-million registered
investments for January reflected a 12.2-percent decline [from] the $1.1 billion recorded in December 2020 (or by $132 million),” the central bank said in a statement.
Year-on-year, registered investments were 23 percent smaller than the $1.23 billion in January
2020, it added.
Of these investments, the bulk — 62.1 percent — were placed in Philippine Stock Exchange (PSE)listed securities: banks; holding firms; property companies; food, beverage and tobacco corporations; and transportation services firms. The remaining 37.9 percent were invested in peso government securities.
The United Kingdom, Singapore, United States, Luxembourg and Hong Kong were the top foreign investors last month. Their investments made up 83.4 percent of the total.
“Outflows for the month ($854 million) were lower [than that] recorded for December 2020 ($1.6 billion) by 46.9 percent (or by $754 million). The US received 71.7 percent of total outflows,” the BSP said.
Gross outflows were also 50.4 percent lower than the $1.72 billion outflows a year ago.
The Bangko Sentral said developments in the month included the January 6 siege of the US Capitol by supporters of former president Donald Trump that left
STATE-owned Development Bank of the Philippines (DBP) seeks to have its charter amended in preparation for its expanded role in the government’s economic recovery efforts.
In a statement on Friday, the lender said it was working with the Department of Finance, state regulators and legislators to introduce the amendments, which include hiking its authorized capital from the current P35 billion to P100 billion.
According to DBP President and Chief Executive Officer Emmanuel Herbosa, a higher capitalization will enable the bank to broaden its credit assistance to priority sectors that were affected by the economic downturn.
“The proposed amendments to the DBP Charter would be a boon to our efforts to undertake more developmental projects, especially in the countryside, where these types of economic interventions are most sorely needed,” Herbosa was quoted as saying in the statement.
The charter was last amended in 1998 through Republic Act 8523, which raised the bank’s authorized capital stock from P5 billion to P35 billion. DBP was originally founded as the Rehabilitation Finance Corp., which was part of the mechanisms of the government to jumpstart reconstruction and economic revival after World War 2 left the country devastated.
Herbosa said there was a bill in the House of Representatives’ Committee on Banks and Financial Intermediaries under deliberation.
The lender hopes that a counterpart measure would be filed at the Senate to fast-track passage before Congress goes into a break in preparation for the 2022 national elections, he added.
“We pledge our full support and cooperation to our legislators and policymakers in our collective efforts to strengthen the DBP’s charter to make it more relevant and responsive to the demands of an ever-changing market and rapidly-evolving economic landscape,” the DBP chief said.
Soraya Adiong, DBP senior vice president for the Legal Services Group, said the proposed changes would allow the bank to broaden its menu of financial products and services, including the authority to engage in traditional and nontraditional modes of financing businesses, while enhancing its compliance with risk-based banking laws and regulations.
An amended charter, she added, would also bolster existing governance mechanisms, tighten sanctions and penalties for specific violations, and provide greater operational and organizational flexibility for the bank.
“Another key component of the amended charter is the grant of perpetual corporate existence to the bank while providing greater leeway for the national government to increase its capitalization without the need for legislation,” Adiong said.