Net ‘hot money’ outflow tops $296M in May – BSP

Foreign portfolio investments turned negative in May, recording the biggest net outflow in three months based on Bangko Sentral ng Pilipinas (BSP) data released on Thursday.

The $206.35-million net “hot money” outflow was a reversal from April’s net inflow of $279.29 million. The result was the largest net outflow since February’s $545.14 million and was also higher than the year-earlier net outflow of $24.35 million.

Registered foreign portfolio investments amounted to $1.212 billion for the month, 11.9 percent lower than the $1.375 billion recorded in April 2018. Inflows also dropped by 18.4 percent from $1.484 billion a year ago.

“This may be attributed to higher United States (US) treasury yields and investor concerns on a weaker peso and rising oil prices which may affect inflation,” the Bangko Sentral said in a statement.

The bulk or 80.2 percent was invested in Philippine Stock Exchange (PSE)-listed securities — mainly banks, holding firms; property developers; food, beverage and tobacco firms; and transportation companies.

Peso government securities accounted for the rest.

The United Kingdom, United States, Singapore, Malaysia and Hong Kong were the top five investor countries with a combined 74.8 percent of the total.

May’s outflows of $1.418 billion reflected an increase of 29.3 percent from the $1.096 billion in April, the central bank said, and were “due mainly to investors’ reaction to renewed geopolitical tension between the US and China coupled with continuous net foreign selling of PSE-listed securities since February of this year.”

”The opposite was noted year-on-year, as outflows declined by 6.0 percent from $1.509 billion in May 2017,” it added.

The United States remained the main destination of repatriated funds, accounting for 77.4 percent.

Taking preliminary results for the first day of June into account, year-to-date hot money flows were positive with a net inflow of $797.19 million.

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