Metro Manila (CNN Philippines, December 31) — After two months of exodus, foreign portfolio investments finally swung to inflow in November according to the Bangko Sentral ng Pilipinas (BSP).
The investments – known as “hot money” for the rapid rate at which they enter and exit the economy – logged net inflows of $109.56 million during the month.
November’s performance is an improvement from the net outflows of $221.11 million recorded in October and $24.16 million in September.
Registered investments amounted to $1.28 billion during the month, improving from October’s $949 million — but lower than $1.35 billion in November last year.
Most of these were in Philippine Stock Exchange-listed securities — or investments primarily in holding firms, information, technology, food, beverage and tobacco, and banks and property.
The rest were funneled to investments in peso government securities, the BSP added.
The United Kingdom topped the main investor countries for November, followed by the United States, Luxembourg, Hong Kong, and Singapore.
Meanwhile, hot money outflows grossed $1.17 billion during the month — higher by 0.4% month-on-month. The US received majority of the outflows, the BSP added.
RCBC chief economist Michael Ricafort said the rise in fund-raising and investment banking activities could have pushed hot money up in November, adding this could continue into the next two months with more upcoming investment banking deals in the pipeline.
“However, offsetting risk factors during the month and in the coming months include the more hawkish signals from the Federal Reserve in terms of faster pace of tapering Fed bond purchases/quantitative easing (QE) in able to better manage/control/curb elevated inflation and inflation expectations, as well as the detection of the Omicron variant,” Ricafort added.
