Net ‘hot money’ outflows dip in June
Credit to Author: ANGELICA BALLESTEROS, TMT| Date: Thu, 18 Jul 2019 16:15:36 +0000
NET outflows of foreign portfolio investments reached $35.72 million last month, significantly lower than the figures posted in May and a year ago, according to the Bangko Sentral ng Pilipinas (BSP).
Data from the central bank showed on Thursday that the June net “hot money” outflows — so named because of how easily these enter and leave the economy — dropped from $749.84 million the month before and $516.12 million in June 2018.
The Bangko Sentral attributed the month-on-month improvement to the May inflation data, the resumption of trade talks between the United States and China, and an anticipated interest rate cut by the US Federal Reserve.
The rate of the increase in the prices of goods and services accelerated to 3.2 percent in May from 3 percent in April. It later eased to 2.7 percent in June. All are within the government’s target of 2 to 4 percent.
US President Donald Trump and Xi Jinping agreed to resume trade negotiations during the Group of 20 meeting in Osaka, Japan on June 28 and 29 after these stalled in May.
Trade tensions between the world’s top two economies — which started last year after Washington accused Beijing of engaging in unfair trade practices — saw them imposing tit-for-tat tariffs worth billions of dollars on each other’s goods, among others.
Year-to-date, the country registered outflows of $720.98 million, reversing the $322.87-million inflows in the same period last year.
BSP-registered investments totaled $1.4 billion in June, up 14.1 percent from May’s $1.2 billion.
Securities listed on the Philippine Stock Exchange — mainly property firms; holding companies; banks; food, beverage and tobacco firms; and telecommunications companies — accounted for about 73.6 percent of these investments; and peso government securities (GS), 26.4 percent.
Transactions from peso GS yielded inflows of $104 million. Those in PSE-listed securities recorded net outlows of $139 million and in other peso debt instruments and portfolio instruments registered less than $1 million each.
The United Kingdom, Malaysia, Singapore, the United States and Hong Kong were the country’s top five investors in June, with a combined share of 82.2 percent.
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