ASEAN KEY DESTINATIONS
$51 million net 'hot money' entered PHL in April
Foreign portfolio investment registered a net inflow of $51 million in April, primarily due to investor confidence in the country's growth potential, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
Central bank data showed the net inflow last month was a reversal from the net outflow of $460 million in March, $409 million in February and $354 million in May 2016.
"This development may be attributed to investor reaction to the World Bank's view that the Philippines will continue to be a top performer in the region, coupled with positive sentiment in anticipation of the country's strong gross domestic product number for the first quarter of 2017," the BSP said.
"Looks like investors saw the Philippine market positively last April compared with other markets," Asian Institute of Management Economics Professor Emmanuel Leyco told GMA News Online.
Foreign portfolio investment is also called hot money because of the ease by which the fund enters and exit markets.
Leyco noted portfolio investments are very liquid and can be withdrawn even within a day's trading based on fund managers' assessments of global financial risks or opportunities.
"Foreign direct investments would be more useful gauge in the evaluation foreign interests in the country as it is long term," he said.
The total hot money inflow of $1.320 billion last month was up 3.6 percent from $1.273 billion a year earlier, but down 3.9 percent from $1.373 billion in March.
The total outflow of $1.268 billion was down 22.1 percent from $1.627 billion a year earlier and by 30.8 percent from $1.833 billion in March.
The BSP noted the bulk or 67.8 percent of foreign portfolio investment was placed in shares traded on the Philippine Stock Exchange, mainly in banks, holding firms, property companies, telecommunications companies and food, beverage and tobacco firms.
Around 32 percent went to peso government securities and 0.2 percent to other peso debt instruments.
Malaysia, Singapore, Hong Kong, United Kingdom and United States were the top five investor countries last month, with a combined share-to-total of 81.7 percent. The US continued to be the main destination of outflows, receiving 75.7 percent of total remittances.
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