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Net ‘hot money’ hits 5-month high

Net foreign portfolio investments remained positive in August, rising to their highest in five months based on Bangko Sentral ng Pilipinas (BSP) data released on Thursday.

The $225.85-million net “hot money” inflow—significantly higher than July’s $53.29 million—came as investments in peso debt instruments and Philippine Stock Exchange (PSE)-listed securities more than offset outflows.

“This may be attributed to investors’ reaction to good second quarter corporate earnings results, the forthcoming infrastructure initiatives of the government, and the recent resumption of trade talks between the US and China which all lifted market sentiments,” the central bank said in a statement.

The August result was the largest net inflow since the $1.132 billion posted in March. It was also a turnaround from the year-earlier net outflow of $57.52 million.

Registered foreign portfolio investments amounted to $1.121 billion for the month, a 16.9-percent improvement from July and up 19.7 percent up from a year ago.

The bulk of the funds was invested in Philippine Stock Exchange (PSE)-listed securities — mainly property developers; holding firms; banks; food, beverage and tobacco firms; and telecommunication companies.

“The balance (19.4 percent) went mostly to peso government securities (GS), while the remaining amount (less than 1.0 percent) went to both other peso denominated debt instruments (OPDIs) and peso time deposits (peso TD),” the BSP said.

“Net inflows were noted for transactions in PSE-listed securities ($39 million), peso GS ($180 million), OPDIs ($6 million), and peso TD (less than $1 million),” it added.

The United Kingdom, United States, Singapore, Hong Kong, and Luxembourg were the top five investor countries with a combined 80.5 percent of the total.

August’s outflows of $895.31 million reflected decreases of 1.2 percent and 9.9 percent, respectively, compared to the previous month and a year earlier.

The United States remained the main destination of repatriated funds, accounting for 81.5 percent.

Hot money flows for the first eight months of the year were positive with a net inflow of $602.01 million.

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