$3.1B of ‘hot money’ exited PHL in January-May — BSP

Tuesday, June 30th, 2020. Filed under: Money & Business News Philippine News World News

MANILA, (Mabuhay) — Foreign portfolio investments (FPI) or “hot money” yielded a net outflow of $3.1 billion million in the first five months of 2020 due to the impact of COVID-19 pandemic and other external pressures, the Bangko Sentral ng Pilipinas (BSP) said Thursday.

FPI is also called hot money because of the ease by which the fund enters and exit markets.

The January to May net “hot money” outflow was recorded as gross outflows of $7.8 billion exceeded $4.7 billion gross inflows for the said period.

The net “hot money” outflow during the period is larger compared to $685 million net inflows in the same period in 2019.

The BSP attributed the exit of FPI to “uncertainties due, among others, to the impact of the COVID-19 pandemic to the global economy and financial system.”

Other key events earlier in the year such as the continuing geopolitical tensions between the US and Iran; (ongoing trade negotiations between the US and China; and renegotiation of the contracts of the country’s water concessionaires.

For the month of May alone, net FPI outflow stood at $1.0 billion, lower than $660 million outflow in April.

Bulk or 88.3% of investments registered were in Philippine Stock Exchange-listed securities mainly to property companies, holding firms, banks, retail companies and telecommunication firms; while the remaining 11.8% went to investments in Peso Government Securities.

The United Kingdom, the United States, Singapore, Hong Kong and Luxembourg were the top five investor countries for the month, with combined share to total at 88.1%. (MNS)

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