September 20, 2019
FOREIGN portfolio investments returned to negative territory after $391.74 million of these flowed out of the country in August, according to the Bangko Sentral ng Pilipinas (BSP).
Net outflows of these investments, or “hot money” — called as such because of how easily these enter and leave the economy — last month reversed net inflows of $15 million in July and $225.85 million in the same month a year ago.
In a statement on Thursday, the central bank said the August outflows took into account several domestic and international developments. These include the ongoing trade
tensions between the US and China; the devaluation of the Chinese currency; protests in Hong Kong; and the country’s lower gross domestic product result for the second quarter.
Registered gross portfolio investments amounted to $1.2 billion, down 27.8 percent from $1.7 billion a month ago, but 8.3 percent higher than $1.1 billion in August last year.
The bulk — about 75.7 percent — of these investments were in Philippine Stock Exchange-listed securities — mainly property companies; holding firms; banks; food, beverage and tobacco companies; and transportation firms. Peso government securities accounted for the remaining 24.3 percent.
“The United Kingdom, Singapore, the United States, Malaysia and Hong Kong were the top five investor countries for the month, with [their] combined share [totaling] 73.9 percent,” the BSP said.
August’s outflows of $1.6 billion were slightly higher than $895.31 million a year ago. However, the figure was 3.6 percent lower than July’s $1.7 billion.
The US remained the primary destination of the repatriated funds, accounting for 78 percent.
Year-to-date, the net outflows of $1.098 billion reversed the $602.01-million net inflow booked in the same period last year.
In 2018, hot money reached a net inflow of $1.204 billion — the highest in five years and an about-face from 2017’s $195.40-million net outflow.
This was better than the central bank’s forecast of a $100-million net outflow and was the biggest net inflow recorded since $4.225 billion in 2013.
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