Foreign portfolio investments or hot money posted net outflows of $698 million in September, a reversal of the net inflows of $153 million in August, the Bangko Sentral ng Pilipinas (BSP) said Friday.
This resulted from the $1.6 billion gross outflows and the gross inflows of $888 million for the month.
The $888 million registered investments for the month went down by $553 million or 38.4 percent from $1.4 billion recorded in August.
About 52.1 percent of registered investments were in Philippine Stock Exchange-listed securities ($462 million), most of which were investments made in banks, holding firms, property, food, beverage and tobacco and utilities companies.
The balance went to peso government securities at $425 million or 47.9 percent.
Investments in September mostly came from the United Kingdom, Singapore, the United States, Luxembourg and Switzerland with combined share of 88.5 percent.
The $1.6 billion gross outflows in September increased by $298 million or 23.2 percent compared to the gross outflows of $1.3 billion in August.
The US remained to be the top destination of outflows, receiving $1.0 billion or 63.6 percent of total outward remittances.
Registered investments in September went down from $892 million recorded in September 2022 by $4 million or 0.5 percent, while gross outflows increased by $326 million or by 25.9 percent vis-à-vis the gross outflows posted in September 2022 at $1.3 billion.
The $698 million net outflows in September were also larger than the $367-million net outflows recorded in the same period a year ago.
Hot money transactions from January to September this year yielded net outflows of $387 million, a downswing from the $222-million net inflows noted for the same period last year.
Portfolio investments are also called hot money because of the ease they are invested in and taken out of the financial markets.
Registration of inward foreign investments delegated to authorized agent banks by the BSP is optional under the rules on foreign exchange (FX) transactions.
It is required only if the investor or its representative will purchase FX from 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 FX will have to be sourced outside the banking system.