Capital flight reached $206-million in May—BSP

Registered foreign portfolio investments, or “hot money,” posted a net outflow of $206.35 million in May, higher than the $24.35-million net outflow a year ago, due mainly to investors’ reaction to renewed geopolitical tension between the United States and China, the Bangko Sentral ng Pilipinas said Thursday.

The central bank in a statement said other reasons for the net outflow was the net foreign selling of listed securities with the Philippine Stock Exchange since February this year, higher US Treasury yields, weaker peso and rising oil prices which may affect inflation.

The May outflow was also a reversal of the $279-million net inflow a month ago. Including the first week of June, portfolio investments since the start of the year stood at a net inflow $797.19 million, a sharp turnaround from the $543.79-million net outflow a year ago.

Total inflows in May reached $1.212 billion, down from $1.484 billion a year ago, while gross outflows hit $1.418 billion, lower than $1.509 billion in the same month last year.

“This may be attributed to higher United States Treasury yields and investor concerns on a weaker peso and rising oil prices which may affect inflation,” the Bangko Sentral said.

The UK, US, Singapore, Malaysia and Hong Kong were the top five investor countries for the month, with a combined share to total at 74.8 percent. About 80.2 percent of investments during the month were in securities listed in the PSE pertaining to banks, holding firms, property companies, food, beverage and tobacco firms and transportation services companies.

The balance went to peso government securities. Net inflows of $74 million were noted for peso government securities while net outflows were recorded for PSE-listed securities and other peso debt instruments.

Registration of inward foreign investments with the Bangko Sentral is optional under the liberalized rules on foreign exchange transactions.

Topics: foreign portfolio investments , Bangko Sentral ng Pilipinas , Philippine Stock Exchange
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