Jan.-Feb. net 'hot money' totaled $727M, says BSP

The net inflows of foreign portfolio investments or hot money surged to $727.17 million in January-February this year, from $418.5 million in the same period in 2009, the Bangko Sentral ng Pilipinas (BSP) reported Thursday. The surge was due to the increase in investments in shares listed on the Philippine Stock Exchange (PSE) and in peso-denominated government securities, BSP Gov. Amando Tetangco Jr. said in a statement. BSP data showed that the gross inflows of foreign portfolio investments tripled to $3 billion in the first two months, from $1.07 billion in the same period in 2009. The gross outflows also almost tripled to $2.279 billion in January-February period, from $767.7 million in the comparative period in 2009, the central bank added. February hot money The net inflows of foreign portfolio investments totaled $534 million in February, nearly thrice the $193 million recorded in January, the BSP said. The BSP said the February net hot money represented almost four times the $139 million recorded in the previous year. The gross inflows reached $1.5 billion last month, from just $500 million in February last year, according to the BSP. The rise in registered investments in February was backed by a surge in investments in peso-denominated government securities to $730 million, from $90 million in the same period last year. "Favorable yields have attracted foreign investor to peso-denominated government securities placements," Tetangco said. Meanwhile, investments in PSE-listed shares amounted to $740 million in February this year, twice the $370 million recorded in the same period last year. The US, Singapore, Luxembourg, Hong Kong, and the UK were the major sources of investments in the Philippines, according to the central bank. The BSP said the gross outflows totaled $935 million in February this year, from $362 million recorded in February last year. The outflows can be traced to the adverse reaction of investors to the "sharp rise in oil prices stemming from escalating violence" in the Middle East and North Africa, Tetangco said. — JE, GMA News