MANILA — Inflows of foreign portfolio investments rose to USD1.48 billion in May 2017 against the previous month’s USD1.32 billion.
However, data released by the Bangko Sentral ng Pilipinas (BSP) showed that portfolio investments, otherwise known as hot money due to the speed it comes in and out of an economy, registered lower inflows in May this year compared to the USD1.78 billion same period in 2016.
The central bank pointed the year-on-year drop to uncertainties given the developments around the world such as the air strike by U.S. forces against Syria, numerous terror attacks around the globe, normalization of U.S. interest rates and issuance of closure orders against several local mining companies.
Bulk of the inflows last May came from the U.S., Singapore, Malaysia, and Luxembourg and 79.1 percent of which were placed in shares of companies listed with the Philippine Stock Exchange (PSE).
The BSP said 18.4 percent of the funds were invested in peso-denominated government securities while 2.5 percent were placed in other Peso-denominated debt instruments.
Outflows in the fifth month this year reached USD1.51 billion, higher than month-ago’s USD1.27 billion, which the central bank traced to profit-taking.
It is, on the other hand, lower than year-ago’s USD1.71 billion outflows
This resulted to a net outflow of USD24.35 million in May this year, a reversal from the net inflow amounting to USD51.49 million in the previous month and the USD72.81 million in May 2016.
”This may be attributed to investor reaction to weak first quarter earnings of some corporations and lower-than-expected GDP data of the country for the first quarter of 2017,” the BSP said in a press release.
Growth of the economy, as measured by gross domestic product (GDP), registered an expansion of 6.4 percent, slower than the 6.9 percent growth same period in 2016. JOANN SANTIAGO/PNA – northboundasia.com