The Philippines recorded $689 million in net inflows of foreign portfolio investments or hot money in February 2024, a reversal from the $76-million net outflows in January, the Bangko Sentral ng Pilipinas (BSP) said over the weekend.
Hot money refers to foreign funds temporarily parked in the equities and money markets to take advantage of short-term interest.
The BSP said transactions on foreign investments registered through authorized agent banks (AABs) showed gross outflows of $859 million in February, lower by 34.5 percent than the $1.3-billion gross outflows recorded in January.
It said the $1.5-billion registered investments in February also went up by 25.3 percent from the $1.2 billion seen in January 2024.
About 61.4 percent of the registered investments were in peso government securities ($951 million), while the balance of 38.6 percent were in PSE-listed stocks ($598 million).
Investments in February mostly came from the United Kingdom, Singapore, the United States, Luxembourg and Hongkong.
Data showed that in the first two months of 2024, foreign portfolio investments also yielded net inflows of $613 million, a turnaround from the $258-million net outflows observed in the same period last year.
Meanwhile, the BSP said the Philippines’ net external liability position rose 4 percent in the third quarter of 2023, driven by non-financial sector’s activities.
The BSP said the country’s net external liability position reached P2.6 trillion in third quarter of 2023, up from P2.5 trillion in the second quarter of the same year.
It said that by sector, the general government’s net financial liability position expanded by 4.2 percent quarter-on-quarter to P9 trillion from P8.6 trillion.
“This resulted from the decline in the national government’s deposits with the central bank, which the national government partly used for the repayment of its domestic and external obligations,” the BSP said.
“On an annual basis, the general government’s net financial liability position increased on the back of lower financial assets and higher debt. Its lower financial assets resulted mainly from the decline in the sector’s deposits in the central bank. In addition, higher debt emanated from higher net issuances of government securities and net availment of foreign loans,” it said.