SHORT-TERM investment flows turned positive in June after four consecutive months of net outflows, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday.
Year to date, however, “hot money” investments — described as such given the ease by which the funds can be taken in and out of an economy — reversed from a net inflow.
Foreign investments registered with the central bank through authorized agent banks (AABs) saw inflows of $889 million and outflows totaling $888 million in June.
The resulting net inflow of $1 million marked a reversal from the year-earlier net outflow of $342 million and the $124 million recorded in May.
The BSP, in a statement, noted that June’s gross inflows were $45 million or 5.3 percent higher compared to the $845 million posted a month earlier.
The bulk, or 78.7 percent, went to Philippine Stock Exchange-listed securities — mainly property, banks, holding firms, food, beverage and tobacco, and telecommunications — while the rest was invested in peso government securities (21.3 percent) and in other instruments (less than 1.0 percent).
The funds mostly came from the United Kingdom, the United States, Luxembourg, Singapore and Switzerland, which had a combined share of 84.2 percent.
June’s outflows, meanwhile, were $81 million or 8.4 percent lower compared to May’s $969 million. Of the outward remittances, the US received $589 million or 66.3 percent.
Year on year, hot money inflows fell by 14.4 percent from $1.0 billion a year earlier while outflows also plunged by 35.7 percent from $1.4 billion “The $1 million net inflows in June 2023 is an improvement from the $342 million net outflows recorded for the same period a year ago,” the central bank said.
Year to date, however, foreign portfolio investments were negative with a net outflow of $803 million as of end-June, reversing from the $778-million net inflow posted a year earlier.
The BSP figures account for funds received by AABs. Registration 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 that accrue on the registered 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 noted.
