‘HOT MONEY’ INFLOW JUMPS 203 PERCENT

$385 MILLION OF $586 MILLION NET INFLOWS WENT TO STOCK MARKET

TRANSACTIONS in foreign portfolio investments or hot money recovered in the first month of the year amid investors’ renewed risk appetite for emerging market assets, the Bangko Sentral ng Pilipinas (BSP) said on Friday.

In a statement, the BSP said that transactions for January yielded net inflows of $586 million, up 203.5 percent from the $193 million inflows recorded in the same month in 2011. Month- on- month, hot money jumped four times compared to $140 million net inflow in December 2011.

Investments in securities listed in the Philippine Stock Exchange (PSE) reached a net inflow of $385 million during the period, while another $199 million were investments in peso government securities.

At least $200-million net inflows went to money market instruments and another $1 million was invested in peso time deposits.

Of the total $ 1.213 billion inflows, meanwhile, at least $627.31 million went out of the country. These outflows were 53.3 percent lower than the $1.344 billion outflows registered in the same period last year, the bulk of which were mostly directed to the US and con- sisted largely of withdrawals from interim peso deposits, the BSP said.

“Registered investments and outflows were lower as investors remained cautious due to renewed worries over Greece’s debt problems and the International Monetary Fund’s cut in growth outlook,” BSP Governor Amando Tetangco Jr. said.

The main beneficiaries of investment in Pse-listed securities were telecommunication companies, holding firms, utility companies, banks and property firms.

The top investor countries were Singapore, Luxembourg, the United Kingdom, the United States and Hong Kong.

Registration of inward foreign investment with the central bank is voluntary.

It entitles the investor or his representative to buy foreign exchange from authorized agent banks and/ or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of dividends/profits/earnings that accrue on the registered investment.

BSP- registered investments pertain only to investments funded by fresh inward remittances of foreign exchange.