Foreign portfolio investments or hot money posted net inflows of $153 million in August, smaller compared to $962 million in July, the Bangko Sentral ng Pilipinas said Friday.
This was a result of the $1.4-billion gross inflows and $1.3-billion gross outflows for the month, data showed.
Portfolio investments are called hot money because of the ease they are invested in and taken out of the financial markets.
Majority of registered investments were in Philippine Stock Exchange-listed securities representing $1.1 billion or 74.2 percent. They were mostly invested in banks, property, holding firms, food, beverage and tobacco and transportation services.
About $372 million or 25.8 percent were parked in peso government securities while the rest were placed in other instruments.
Investments in August mostly came from Japan, the United Kingdom, the United States, Luxembourg and Singapore with combined share of 88.9 percent.
The BSP said that year-on-year, registered investments in August were higher than $792 million in August 2022 by $649 million or 82.0 percent, while gross outflows increased $409 million or 46.6 percent from $878 million.
The $153-million net inflows in August 2023 were a reversal of the $86-million net outflows recorded a year ago.
Meanwhile, transactions from January to August yielded net inflows of $311 million in 2023, down from $589 million in 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 banks and/or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of earnings that accrue on the registered investment.
The BSP said without such registration, the foreign investor could still repatriate capital and remit earnings on investment but the FX would have to be sourced outside the banking system.