HOT money posted net inflows in October, reversing seven consecutive months of outflows, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday.
BSP-registered foreign portfolio investments yielded $439 million for the month, as gross inflows reached $1.4 billion, outpacing outflows of $913 million.
Around 78.8 percent of the total investments were invested in companies listed in the stock exchange, while the remaining 21.2 percent went to investments in government securities.
Hot money refers to funds that are controlled by investors who actively seek short-term returns. These investors scan the market for short-term, high interest rate investment opportunities.
The UK, US, Singapore, Luxembourg and Hong Kong were the top five investor countries for the month, with combined share totaling 80.9 percent, the BSP said.
Net outflows for the January to October period were at $3.9 billion, larger than the $1.2 billion posted in 2019.
The BSP attributed this to “the ongoing impact of the Covid-19 pandemic to the global economy and financial system, coupled with international and domestic developments such as geopolitical tensions, certain corporate governance issues and extended quarantine measures in select regions in the country.”
The Philippine economy plunged 11.5 percent in the third quarter, marking the first time in 35 years that the country’s gross domestic product contracted for three straight quarters.
(CSL with PR)