News Update ‘Hot money’ falls in 2011, says Bangko Sentral

Foreign portfolio investments or “hot money” totaled $16.47 billion last year, but a 47.8 percent surge in withdrawals deflated the net inflows. Foreign investments in treasury bills, government bonds, and shares listed on the Philippine Stock Exchange last year hit $16.47 billion, up 26.7 percent from $12.99 billion in 2010, the Bangko Sentral ng Pilipinas (BSP) said Thursday. However, total outflows moved at a faster pace — 47.8 percent — totaling $12.4 billion, trimming the net inflow to $4.08 billion. The net inflow was down 11.5 percent from 2010. The BSP said the outflows surged “due to uncertainties in the euro zone” and consisted mostly of withdrawals of interim peso deposits. The withdrawals were highest in January 2011 at $1.34 billion and $1.30 billion in March. Profit-taking was also spurred by the shaky economic recovery in the United States and some tension in the Korean peninsula. Singapore, the United Kingdom, the United States, Luxembourg, and Hongkong were the top investing countries accounting for 87.2 percent of total investments, according to BSP data. Most of their investments in the PSE went to holding firms ($2.1 billion), banks ($1.5 billion), telecos ($1.4 billion) and property developers ($1.3 billion). Foreign investors also bought $6.7 billion worth of peso-denominated government securities and placed $496 million in peso time deposits. — ELR/VS