$392M in hot money left PHL in August 2019: BSP

BANGKO Sentral ng Pilipinas (BSP)-registered investments in August amounted to US$1.2 billion, reflecting a 27.8 percent decline from the US$1.7 billion figure in July.

About 75.7 percent of investments registered during the month were in PSE-listed securities (pertaining mainly to property companies, holding firms, banks, food, beverage and tobacco companies, and transportation firms); while the 24.3 percent balance went to investments in Peso government securities.

The United Kingdom, Singapore, the United States (US), Malaysia, and Hong Kong were the top five (5) investor countries for the month, with combined share to total at 73.9 percent.

Outflows for the month (US$1.6 billion) were slightly lower compared to the US$1.7 billion (or by 3.6 percent) recorded in July 2019.  The US received 78.0 percent of total outflows.

Overall transactions for August 2019 yielded net outflows of US$392 million, in contrast to the net inflows of US$15 million recorded last month. Domestic and international developments for the month included:

(i) ongoing trade tensions between the US and China;

(ii) the devaluation of the Chinese yuan;

(iii) inversion of the US Treasury bond yield curve;

(iv) heightened protests in Hong Kong; and (iv) the lower gross domestic product outturn for the second quarter of 2019.

Year-on-year, investments were 8.3 percent higher than the US$1.1 billion level posted in August 2018.  Similarly, gross outflows were higher from outflows noted a year ago (US$895 million or by 79.3 percent).

In contrast, the net outflows for the month were a reversal of the US$226 million net inflow noted for the same period a year ago.

Registration of inward foreign investments with the Bangko Sentral ng Pilipinas (BSP) is optional under the liberalized rules on foreign exchange transactions.

The issuance of a BSP registration document entitles the investor or his representative to buy foreign exchange from authorized agent banks and/or their subsidiary/affiliate foreign exchange corporations for 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 his investment but the foreign exchange will have to be sourced outside the banking system. (BSP)

(Photo Courtesy of GMA network)