MANILA - The Philippines enjoyed significant inflows of "hot money" last month, the Bangko Sentral ng Pilipinas (BSP) said today.
In a report, the BSP said the country saw $2.691 billion in net inflows of foreign portfolio investment in September, up 72 percent from the $1.5 billion in the same month last year.
This led to net inflows of $2.691 billion in the January to September period, ahead of the $2.649 billion in the same nine-month period last year.
Unlike job-creating foreign direct investments (FDI), portfolio funds are invested in financial assets, such as shares in Philippine listed firms and government IOUs. Portfolio investments are also called "hot money" because they flee at the slightest negative news.
The BSP attributed the increase in portfolio funds last month to "the recognition of the country's sound macroeconomic fundamentals and record growth in the first two quarters of this year." To recall, the Philippine economy grew at a record 7.5 percent in the first half of this year, higher than the government's full-year goal of 6-7 percent and the fastest in Asia alongside China.
Hot money in September went to Philippine Stock Exchange (PSE)-listed securities at $1.8 billion; peso government securities, $714 million; and peso time deposits, $52 million. The main beneficiaries for PSE-listed securities consist of holding firms, banks, property firms, information technology companies, and utilities.
The top five investor countries last month were Singapore, the United Kingdom, the US, Luxembourg, and Hong Kong with a combined share of 84.4 percent.
source: interaksyon.com