MANILA, Philippines – Hot money inflows in May turned around as the local stock market showed to be an attractive investment for foreigners, the Bangko Sentral ng Pilipinas said.
BSP data showed that in May, there were over $498-million worth of funds coming into the country compared with $276-million funds which flowed out of the country in April.
Foreign portfolio investments looked for opportunities in the emerging markets, leading to the significant increase in gross inflows in May.
The BSP said registered foreign portfolio investments more than doubled to $978 million in May from April’s $435 million. Total outflows, on the other hand, slipped by a third to $480 million
The BSP reported that 91 percent of gross portfolio inflows were invested in shares listed at the Philippine Stock Exchange while nine percent went to peso-denominated government securities.
On the other hand, 97 percent of the portfolio funds that left the country were investments taken out of interim peso deposits or IPDs.
Despite the dismal 0.4-percent economic expansion for the Philippines in the first three months of the year, investors were also bullish on the local economy as shown by a substantial Japanese investment in the country’s food, beverage and tobacco sector, said central bank governor Amando Tetangco.
Elsewhere in the globe, confidence in the world economy rose for the third straight month as job losses in the U.S. continued to slow down and global production improved.
Tetangco said this supported the emerging consensus that the crisis was bottoming out.
The May net inflows brought the five-month net inflow at $276 million, a contrast to the net outflow of $461 million for the comparable period in 2008.
Gross investment inflows during the five-month period totaled nearly $2.7 billion, 43-percent lower than the recent $4.7-billion posted last year as cautiousness lingered among investors.
The BSP reported that investments in PSE-listed shares amounted to $1.9 billion, making up 73 percent of total inflows. These inflows, however, were 35-percent lower than the $3-billion level in 2008.
The BSP said about 30 percent of these went to food, beverage and tobacco companies, and 28 percent to telecommunication firms. Similarly, combined investments in peso GS and peso bank deposits with minimum maturity of 90 days dropped to $673 million from last years $1.7 billion.
Meanwhile, placements in money market instruments marginally rose by $49 million.
The United States, Japan, the United Kingdom, Singapore and the Netherlands were the top investor countries, collectively contributing 84 percent of total investments during the period.
Gross investment outflows, on the other hand, amounted to $2.4 billion, a 53-percent slide than last years $5.1 billion, signaling improving investor sentiment. GMANews.TV
