SHORT-TERM foreign investments turned negative in June following a net inflow in the previous month, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday.
The investments registered with the central bank through authorized agents, also known as “hot money,” as these can quickly be moved to maximize profits from interest rates, recorded a net outflow of $27 million.
This was a reversal from net inflows of $43 million and $1 million posted a month earlier and in June last year.
Overall inflows for the month totaled $1.0 billion, higher than May’s $1.1 billion. Gross outflows, meanwhile, hit $1.1 billion from $1.0 billion a month earlier.
The funds were mostly invested in peso government securities (52.8 percent or $551 million) and the rest in Philippine Stock Exchange-listed securities (47.2 percent or $492 million) — holding firms, banks, transportation services, property, and electricity, energy, power and water.
Most of the short-term investments came from the United Kingdom, the United States, Singapore, Luxembourg and Switzerland, which had a combined share of 86.9 percent.
The US remained the main destination for outflows, accounting for 55.8 percent at $597 million.
Year on year, inflows rose from June 2023’s $889 million, while outflows were also higher than year-earlier $889 million.
Year to date, hot money flows remained positive at a net $81 million, reversing from the $804-million net outflow in the comparable 2023 period.
Security Bank Corp. chief economist Robert Dan Roces said that despite the monthly fluctuations, “the overall trend suggests improved investor sentiment towards the Philippine economy.”
The BSP tally accounts for funds received by authorized agent banks (AABs). Registration of the investment is only required if the investor or its representative purchases foreign exchange from AABs or their subsidiaries/affiliates for the repatriation of capital and remittance of earnings from the investment.
“Without such registration, the foreign investor can still repatriate capital and remit earnings on its investment, but the FX (foreign exchange) will have to be sourced outside the banking system,” the central bank said.
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