BSP: Net 'hot money' was $2B in first five months

The Bangko Sentral ng Pilipinas on Friday said ‘heightened investor interest’ spurred a $7.9-billion buying spree of local shares and government securities from January to May this year. However, outflows of $5.9 billion tempered the foreign portfolio investments profile, resulting in net inflows of $2 billion, which was nevertheless a net increase of 160 percent from $670 million. The investment spree was most active in the Philippine Stock Exchange where $1 billion was spent to gobble up shares of holding firms. A $697-million chunk went to banks while $520 million were invested in telecommunication shares. The utilities and property development sectors got about half a billion dollars each. Foreign portfolio investments are also referred to as “hot money" because of the ease with which investors can take the funds out of the country. Foreign appetite for peso government securities grew by 119 percent last May, reaching $513 million compared to only $234 million in the same month last year. Most of the outflows from January to May consisted of withdrawals from interim peso deposits (IPD). In May alone, IPD investments “more than tripled to $127 million from $40 million last year," the BSP said. Hong Kong, Luxembourg, Singapore, United Kingdom and United States were the top investors last month responsible for 89.4 percent of the portfolio investments for the months. — Earl Rosero/VS, GMA News