BSP searches for ways to keep hot money coming

The Bangko Sentral ng Pilipinas (BSP) on Thursday said it started reviewing monetary measures that would continue to attract foreign portfolio investment or hot money into the Philippine market. The Monetary Board, the central bank policy-setting body, would release a “menu of options" after a week, BSP Deputy Gov. Diwa Guinigundo said, refusing to give more details about the new move of the central bank. “We are studying a menu of options. There could be adjustments like in our foreign exchange rules," Guinigundo said. The influx of foreign capital has been strong since August, Guinigundo said, pointing out that the BSP may need to further liberalize the rules on foreign exchange transactions to ensure the free and open movement of current account receipts and capital movements. “We are seeing strong capital inflows that definitely will have impact on our macroeconomic variables," Guinigundo said. BSP data showed that foreign portfolio investment totaled $1.066 billion as of Sept. 10, or eight times more than $128.32 million a year earlier. The arrival of hot money is buoying the Philippine stock market to record highs, supporting the strengthening peso, and helping BSP managed its inflation goals. —JE/VS, GMANews.TV