RP registers US$ 32.2M hot money net inflows in March ’09

April 18, 2009 1:59 am 

MANILA, April 17 – News of the US government's plan to buy banks' bad assets boosted inflows of foreign portfolio investments otherwise known as hot money in the Philippines last March after it posted net inflows of US$ 32.2 million.

The Bangko Sentral ng Pilipinas (BSP) on Friday reported that the latest net inflows was contrary to the US$ 198.7 million net outflow in the second month of the year.

BSP Governor Amando Tetangco Jr. said "gains in Wall Street following the US Government’s plan to buy up to US trillion in toxic assets from banks to spur economic recovery and favorable economic reports contributed significantly to the positive outcome during the month."

"Selective buying of shares of key blue chip companies including those which reported positive earnings for 2008, and the BSP’s further 25 basis point reduction in key policy rates on 5 March 2009 also helped boost investor confidence,” he said.

In the third month this year, foreign portfolio investments totaled US$ 559.3 million, bulk or 54 percent of which amounting to US$ 301.6 million were placed in shares listed with the Philippine Stock Exchange (PSE).

While 38 percent of it amounting to US$ 211.5 million were invested in peso denominated government securities (GS) and the remaining eight percent or about US$ 46.2 million were placed in money market instruments.

Total outflows for the month reached US$ 527.2 million, most or 97 percent of which amounting to US$ 513.7 million composed of peso bank deposits including proceeds of matured portfolio investments and earnings temporarily parked in interim peso deposit (IPD) accounts.

Other outflows include the US$ 10.5 million, which is about two percent of the total, withdrawals of PSE-listed investments; peso GS amounting to US$ 0.6 million; and the US$ 2.3 million that came from immediate remittance of cash dividends, profits and earnings not parked in IPD accounts.

For the first quarter this year, hot money resulted to a net inflows of US$ 54.8 million, far better than the US$ 129.8 million net outflow in the first three months of 2008.

Net inflows were recorded in investments in listed shares at US$ 681.0 million, peso GS at US$ 396.9 million, and money market at US$ 46.1 million.

However, placements in peso bank deposits registered a net outflow of about US$ 1.1 billion.

Total investments reached almost US$ 1.3 billion during the three-month period but this is 59 percent decline from year-ago's US$ 3.1 billion "as investors remained generally risk averse and cautious amidst the precarious state of the global economy."

While total outflows during the same period reached US$ 1.2 billion, which is 62 percent lower than year-ago's US$ 3.2 billion, the central bank said. (PNA)



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