FOREIGN portfolio investments, or “hot money,” posted a net inflow of $162.16 million in January on fund managers’ optimism over the passage of the first phase of the government’s tax reform program and positive news on corporate earnings, Bangko Sentral ng Pilipinas said Friday.
The bank regulator also attributed the expected higher government spending for infrastructure projects under the ambitious P8.4-trillion “Build, Build, Build” program for the net inflow.
However, the January figure was lower than the net inflow of $301 million a year ago, and $457 million a month ago.
Total inflows in January reached $1.62 billion, up from $1.147 billion a year ago, while total outflows hit $1.46 billion, higher than $845 million on year.
“About 69.2 percent of investments registered during the month were in Philippine Stock Exchange-listed securities (pertaining mainly to holding firms, banks, property companies, food, beverage and tobacco firms, and utilities companies),” Bangko Sentral said.
The 30.8-percent balance went to peso government securities. Transactions in PSE-listed securities and peso government securities yielded net inflows of $80 million and $82 million, respectively.
The United Kingdom, the United States, Malaysia, Singapore and Hong Kong were the top five investor countries for the month, with a combined share of 80.2 percent.
The US continued to be the main destination of outflows, receiving 79.9 percent of total remittances.
Foreign portfolio investments are also called “hot money” because of the ease they are invested in and taken out of the domestic financial markets.
Registration of inward foreign investments with the Bangko Sentral is optional under the liberalized rules on foreign exchange transactions. The issuance of a Bangko Sentral registration document entitles the investor or his representative to buy foreign exchange from authorized agent banks and/or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of earnings that accrue on the registered investment.