Net foreign portfolio investments turned positive in November, rising to their highest in eight months based on Bangko Sentral ng Pilipinas (BSP) data released on Friday.
The $832.07-million net “hot money” inflow — a rebound from October’s $67.83-million net outflow — came as investments in peso debt instruments and Philippine Stock Exchange (PSE)-listed securities more than offset outflows.
“This may be attributed to positive investors’ reaction to the following: decreasing global oil prices, BSP’s decision to raise its policy rate and progress on the rice tariffication bill, all of which are expected to temper inflation, as well as Chinese President Xi Jinping’s visit to the country, which was expected to further deepen ties with China in terms of diplomacy and business development,” the central bank said in a statement.
Dubai crude prices fell week-on-week by nearly $4.00 per barrel while Mean of Platts Singapore gasoline and diesel also dropped by about $3.70 and $3.00 per barrel, respectively, according to a November 21 Energy department report.
Prior to last week’s rate hike pause, monetary authorities raised key interest rates for a fifth time on November 15. The 25-basis point (bps) adjustment brought the Bangko Sentral’s overnight borrowing, lending and deposit rates to 4.75 percent, 5.25 percent and 4.25 percent, respectively.
Also during the month, Congress approved the replacement of quantitative restrictions on rice imports with tariffs and the removal of unnecessary government intervention in the rice market.
During Xi’s November 20-21 visit, meanwhile, China and Philippines inked 29 deals ranging from cooperation in education, culture and industrial park development to jointly promoting infrastructure, agriculture cooperatives and establishing sanitation protocols for shipping coconuts.
The November “hot money” result was the largest net inflow since the $1.132 billion posted in March. It was also higher from the year-earlier net inflow of $107.71 million.
Registered foreign portfolio investments amounted to $2.040 billion for the month, more than twice the $952.60 million in October and reflecting an 80.8-percent increase from the $1.128 billion recorded a year earlier.
The bulk of the funds was invested in PSE-listed securities — mainly food, beverage and tobacco companies; holding firms; property developers; banks; and utilities.
The 33.2-percent balance, meanwhile, went to peso government securities (GS).
“Transactions in peso GS and PSE-listed securities yielded net inflows of $510 million and $322 million, respectively,” the Bangko Sentral said.
The United Kingdom, Singapore, the United States, British Virgin Islands and the Cayman Islands were the top five investor countries with a combined 83.5 percent of the total.
November’s outflows of $1.208 billion were higher by 18.4 percent compared to October 2018 and November 2017.
The United States remained the main destination of repatriated funds, accounting for 84.8 percent.
Hot money flows for the first 11 months of the year were positive with a net inflow of $925.95 million.