Net ‘hot money’ flows reach $304M
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 08 Apr 2019 16:19:48 +0000
Foreign portfolio investments hit a net inflow of $304.83 million in mid-March, Bangko Sentral ng Pilipinas (BSP) data showed, lower from a net inflow posted a year earlier.
The central bank’s latest update on “hot money” — called such due to the ease by which the funds can be taken in and out of an economy — put year-to-date inflows at $4.831 billion against total outflows of $4.526 billion.
In the same period last year, foreign portfolio investments hit a net inflow of $744.42 million.
The week ending March 22 saw a net outflow of $543.64 million.
Hot money is mostly invested in the stock market and does not necessarily create jobs, unlike foreign direct investments that are used to build factories and buy capital equipment.
Speculative funds invested in financial assets are a component of the Philippines’ balance of payments, which summarizes the country’s economic transactions with the rest of the world over a certain period.
Last year, these investments surged to a net inflow of $1.204 billion, the highest in five years and an about-face from 2017’s $195.40-million net outflow.
The 2018 tally was also better than the BSP’s forecast of a $100-million net outflow and was the largest net inflow since 2013’s $4.225 billion.
The United Kingdom, the United States, Singapore, the Netherlands and Hong Kong were the top five investor-countries for the year with a combined 72.8 percent of the total.
The US remained the main destination of outflows, accounting for 78.8 percent of the total.
The Bangko Sentral expects this type of investment to post a net outflow of about $200 million this year.
The post Net ‘hot money’ flows reach $304M appeared first on The Manila Times Online.