Hot money outflow hits $299 M in April

MANILA, Philippines — More foreign portfolio investments or speculative funds exited the Philippines for the second straight month as net outflow reached $298.8 million in April, reversing the $279.29 million net inflow recorded in the same month last year, according to the Bangko Sentral ng Pilipinas.

The BSP attributed the pull out of more foreign portfolio investments or hot money to the delayed passage of the 2019 national budget as well as the damage caused by the earthquake last April 22.

“Investors also stayed cautious amid the lack of fresh catalysts in the market and ongoing trade negotiations between the US and China,” the BSP said.

The BSP said outflows of foreign portfolio investments went up by nearly 18 percent to $1.29 billion in April from $ 1.09 billion in the same month last year, while inflows fell by 28 percent to $989.96 million from $1.37 billion.

About 79.2 percent of investments registered in April were in securities listed at the Philippine Stock Exchange (PSE) particularly in property firms, holding companies, banks, transportation service providers as well as food, beverage and tobacco companies.

On the other hand, about 20.8 percent went to peso government securities, while less than one percent went to peso time deposits.

By instrument, net outflows were recorded for peso government securities with $238 million, PSE-listed securities with $61 million, other peso debt instruments and other portfolio instruments with less than $2 million.

The BSP said the United Kingdom, US, Singapore, Hong Kong and Luxembourg cornered 84.8 percent of the total gross inflows, while the US remained the biggest recipient of foreign portfolio investments pulled out from the Philippines with a share of 71.1 percent.

For the first four months, the BSP said the Philippines booked a net inflow of $64 million, down compared to the $1.05 billion in the same period last year.

Gross inflows slipped by nearly five percent to $6.19 billion from January to April compared to the $6.51 billion inflows in the same period last year, while gross outflows booked a 12 percent increase to $6.13 billion from $5.47 billion.

The BSP expects the Philippines to register a net outflow of foreign portfolio investments amounting to $200 million this year. Last year, the net inflow of foreign portfolio investments hit a five-year high of $1.2 billion, reversing the net outflow of $195.4 million in 2017.