FOREIGN portfolio investments or hot money from May 15 to 19 posted a net inflow of $181 million, higher than $123 million a year ago, as foreign fund managers remained bullish on the country’s macroeconomic fundamentals, data from Bangko Sentral ng Pilipinas on Friday show.
Total inflows for the period reached $437.92 million, offsetting gross outflows of $256.86 million. The figure brought hot money since the start of the year to a net outflow of $400.84 million, significantly higher than the net outflow of $77.65 million a year ago.
Foreign portfolio investments are overseas funds that are temporarily invested in local stocks, government securities and money market. These are also called “hot money” because of the ease they are invested in and taken out of the local markets.
Hot money in April posted a net inflow of $51.49 million, a reversal of the net outflows of $354 million a year ago and $459.86 million a month ago. Bangko Sentral attributed the turnaround as a positive reaction to the recent World Bank view that the Philippine economy would continue to be a top performer in the region.
The World Bank in mid April said the Philippine economy had the potential to expand by close to 7 percent in the next three years and remained one of the top performers in the region.
World Bank lead economist in the Philippines Birgit Hansl said growth was seen at 6.9 percent for 2017 and 2018, and 6.8 percent for 2019.
The consensus forecast of economists for GDP growth in the first quarter was around 6.8 percent to 6.9 percent. But the Philippine Statistics Authority said the economy only managed to grow 6.4 percent, slower than 6.9 percent a year ago in the absence of robust spending in the run-up to the national elections in May 2016.
Despite the slowdown, the first-quarter expansion was enough to outperform its peers in the region. It was also second to the 6.9-percent growth of China.
Total inflows of portfolio investments for the month reached $1.3 billion, offsetting the gross outflows of $1.26 billion. This brought hot money in the first four months to a net outflow of $516 million, a turnaround from the $56.26 million net inflow a year ago.