Registered foreign portfolio investments or hot money in May 2023 posted net outflows of $124 million, lower by 64.6 percent and by 54.0 percent than the net outflows recorded in April 2023 of $352 million and in May 2022 of $270 million, respectively, the Bangko Sentral ng Pilipinas said Thursday.
BSP said the lower May net outflows resulted from gross outflows of $969 million and gross inflows of $845 million for the month.
The $845 million registered investments for the month are higher by 18.5 percent (or by $132 million) compared to the $713 million recorded in April 2023.
Majority of registered investments ($589 million or 69.7 percent) were in Philippine Stock Exchange-listed securities (investments mainly in banks, food, beverage and tobacco, holding firms, property, and transportation services).
The remaining were in peso government securities ($256 million or 30.3 percent) and in other instruments (less than one percent).
The top five investor countries for the month were the United Kingdom, the United States, Singapore, Luxembourg and Hong Kong with combined share to total at 86.6 percent.
The $969 million gross outflows for the month are lower by 9 percent or by $95 million compared to those recorded in April 2023 at $1.1 billion.
The US received 66.2 percent of total outward remittances.
Transactions from January to May 31, 2023 yielded net outflows of $805 million, a reversal of the $1.1 billion net inflows noted for the same period last year.
Registration of inward foreign investments delegated to authorized agent banks by the BSP is optional under the rules on foreign exchange transactions.
It is required only if the investor or its representative will purchase 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.
Without such registration, the foreign investor can still repatriate capital and remit earnings on its investment but the foreign exchange will have to be sourced outside the banking system.
Portfolio investments are also called “hot money” because of the ease they are invested in and taken out of domestic financial markets.
For the full-year 2022, foreign portfolio investments posted net inflows of $887 million, a reversal of the $574-million net outflows a year ago, as fund managers remained confident in the country’s macroeconomic fundamentals despite uncertainties on the external front.
The 2022 net inflows, however, missed the $3.5-billion net inflows projection of the BSP for the entire year. Gross inflows for the year reached $12.343 billion, which offset the $11.457 billion gross outflows.
BSP has retained its forecast for registered foreign portfolio investments this year and in 2024 at $2.5 billion and $3.5 billion, respectively. Julito G. Rada