ASEAN KEY DESTINATIONS
$58M ‘hot money’ exited PHL in August, says BSP
Foreign portfolio investment or "hot money" registered a net outflow of $58 million in August — a reversal From net inflows recorded a month ago And a year earlier — on the back of hesitancy to invest due to the so called "ghost month," data from the Bangko Sentral ng Pilipinas (BSP) showed.
Central bank data, released Thursday, showed the net outflow last month was down 34.7 percent from $206-million net inflow in July and fell by 46.7 percent from $427 million a year earlier.
Foreign portfolio investment is also called hot money because of the ease by which the fund enters and exits markets.
"This may be attributed to August being considered the 'ghost month'," the BSP said in a statement.
The ghost month started on August 22 and will end on September 19, 2017, supposedly a time for taking a break from making important decisions especially when money is involved as the gates of hell are open and the spirits of the underworld are free to roam the face of the earth.
According the BSP, investors' reaction to the following issues also affected the flow of foreign portfolio investments:
Rising geopolitical tension between the US and North Korea
Mixed second-quarter corporate earnings
Reinvigorated anti-drug campaign of the administration
Alleged anomalies at the Bureau of Customs
Total outflow last month reached $994 billion, lower by 19.1 percent from $1.2 billion in July and fell by 25.3 percent from $1.3 billion in August 2016.
Transactions from January 2 to September 1, reached a net outflow of $319 million, a reversal from net inflow of $1.97 billion in the same period last year.
"The cumulative net outflows resulted from certain domestic and international developments such as the US air strike in Syria, global terrorist attacks, interest rate hikes by the US Federal Reserve, political turmoil in the US, tension between the US and North Korea, and the closure order for several mining companies in the country," the BSP said.
The bulk or 84.9 percent of investments registered during the month were placed in shares traded on the Philippine Stock Exchange, mainly in banks, holding firms, food, beverage and tobacco companies, property firms, and transportation services companies.
The 15.1 percent balance mainly went to peso government securities.
The United Kingdom, US, Luxembourg, Malaysia, and Hong Kong, were the top five investor countries for the month, with combined share-to-total of 77.7 percent.
The US continued to be the main destination of outflows, receiving 79.9 percent of total remittances.
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