‘Hot money’ posts net $12.3B inflow in July

The Philippines is not exempt from economic setbacks as a result of global difficulties, such as the Greek debt crisis, but it remains attractive to portfolio investors, as shown by the volume of foreign portfolio investments.

Data released by the Bangko Sentral ng Pilipinas (BSP) showed that total inflows of “hot money”, dubbed due to the speed it comes and goes out of the country, reached $12.3 billion as of the week ending July 3, 2015.

This is higher than the $11.56 billion outflows during the same period, resulting in a $737.58 net inflow.

The reported net inflow to date is a reversal from the $1.3-billion net outflow in the week ending July 4, 2014.

However, the country posted a $521.99-million net outflow last June alone, as against the $43.95 net inflow same period last year.

It is, on the other hand, lower than month-ago’s $569.27-million net outflow.

Total inflows last month reached $1.69-million, and bulk or 80.5 percent of these came from the United States, United Kingdom, Singapore, Luxembourg and Hong Kong.

Total outflows during the same month reached $2.2 million.

The central bank attributed the outflows to the weaker-than-expected domestic output in the first-quarter of the year, drop in first-quarter corporate earnings, profit-taking, concerns on the expected normalization of US interest rates, and the Greek debt crisis. TMM