Net ‘hot money’ inflow hits $545 M

oreign portfolio in estments or hot money registered a net inflow of $545.08 million in May, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

The central bank said the net inflow recorded last month was a turnaround from a net outflow of $640.84 million recorded in the same period last year.

The reversal was attributed to investors’ strong confidence in the economy and positive quarterly corporate results.

Gross inflows dropped two percent to $1.97 billion in May, while gross outflows fell 46 percent to $1.42 billion.

The central bank said the bulk of portfolio investments in May went into Philippine Stock Exchange-listed securities, primarily to property companies; banks; holding firms; food, beverage and tobacco firms; and telecommunication firms. More than 20 percent were invested in peso-denominated government securities while the remaining four percent went into pesodenominated time deposits.

The top five investor countries were the United Kingdom, Singapore, the United States, Hong Kong, and Luxembourg. The BSP noted the United States continued to be the main destination of outflows.

For the first five months of the year, foreign portfolio investments registered a net outflow of $1.42 billion, a reversal of the net inflow of $1.58 billion in the same period last year.

Gross inflows during the period decreased 32 percent to $8.74 billion, while gross outflows also slid nine percent to $10.16 billion.