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Hot money rose 244% to $2.36b in Jan.-June – BSP


Foreign portfolio investments or "hot money" placed in shares listed on the Philippine Stock Exchange (PSE) and peso-denominated government securities more than tripled in the first half of the year, the Bangko Sentral ng Pilipinas (BSP) reported Thursday. Net inflows of foreign portfolio investments jumped 244 percent to $2.36 billion in January to June from $686.57 million in the same period last year, BSP Gov. Amando Tetangco Jr. said in a statement. The net amount has already surpassed the full year target of $2.9 billion set by monetary authorities. These investments are also called hot money because they could be taken out of the country as quickly as they were brought in. In gross terms, inflows more than doubled to $9.14 billion from $4.33 billion in the same comparable period, the central bank chief said. Investments in PSE-listed shares rose 57 percent to $4.7 billion from $3 billion, BSP data showed. The major recipients were holding firms ($1.2 billion), banks ($798 million), telecommunications companies ($629 million), property developers ($603 million), and utilities firms ($594 million). Placements in peso-denominated sovereign debt papers jumped 322 percent to $4.2 billion from $995 million, helped by favorable rates for longer-dated government securities. 96.7% placed in stocks and securities "Combined investments in PSE-listed shares and peso government securities comprised 96.7 percent of total registered investments," Tetangco said. The 3.3-percent balance was placed in peso time deposits ($292 million), unit investment trust funds ($6 million), and money market instruments with ($6 million). Tetangco said outflows — mostly withdrawals from interim peso deposits — rose 84.7 percent to $6.68 billion from $3.67 billion. For the month of June alone, hot money turned to a net inflow of $353.79 million from a net outflow of $85.84 million in the same month last year as inflows went up by 67.5 percent to $1.35 billion from $809.36 million while outflows climbed 11.9 percent to $1 billion from $895.19 million. The inflow of foreign portfolio investments reached a new record $4.61 billion last year, or nearly 12 times over the $388.02 million in 2009 as funds continued to flood emerging markets including the Philippines due to the fragile growth in the US and Europe. — VS, GMA News

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