Portfolio investments swing back to net inflow

MANILA, Philippines - Foreign portfolio investments or hot money swung back to a net inflow in April following four consecutive months of net outflows, the Bangko Sentral ng Pilipinas reported yesterday.

“The net inflows arose from investor optimism about the economy’s growth and strong quarterly corporate results, ignoring the possibility of a further cut in the United States Federal Reserve’s quantitative easing program,” the BSP said.

Net inflows of foreign portfolio investments amounted to $323.75 million in April, an improvement from the $91.51-million net outflow recorded in March.

The latest net inflow, however, was 71.4 percent lower than the $1.131-billion net inflow recorded in April last year.

Gross inflows in April slid 46.7 percent to $1.871 billion from a year ago, while gross outflows declined by 34.9 percent to $1.547 billion.

The BSP said the bulk or 76.7 percent of portfolio funds are invested into Philippine Stock Exchange-listed securities, specifically to holding firms, property companies, banks, telcos, and utilities. The remaining 23.3 percent were invested in peso-denominated government securities.

The five biggest investors during the month were the US, Singapore, the United Kingdom, Malaysia, and Luxembourg.

In the four months to April, the country saw a net hot money outflow of $1.967 billion, a reversal of the $2.218-billion net inflow recorded in the same month last year. 

The BSP expects a net hot money inflow of $2.1 billion this year.