Rising consumer prices amid the surge in coronavirus disease 2019 infections prompted foreign portfolio investors to pull out more than $540 million in the Philippines in March, according to the Bangko Sentral ng Pilipinas (BSP).
Central bank data showed that net outflows of foreign portfolio investments, or “hot money” — so called because of how easily these go in and out of the economy — surged to $540.97 million in the third month of the year, a significant uptick from February’s $40.41-million net outflows.
The latest figure — the highest net outflows since last May’s $1 billion, but lower than the year-earlier’s $961.08-million net outflows — resulted from $824.23 million in inflows and $1.36 billion in outflows.
In a statement, the central bank said the registered investments in March eased by 38.4 percent from the $1.33 billion in February. Year-on-year, inflows fell by 13.6 percent from the $953.77 million.
Of these investments, the bulk — 90.5 percent — were placed in Philippine Stock Exchange-listed securities: banks, property companies, holding firms, food, beverage and tobacco companies, and transportation services firm, while the remaining 9.5 percent went to investments in peso government securities.
The United Kingdom, United States, Luxembourg, Switzerland and Hong Kong were the top foreign investors last month. Their investments made up 78.7 percent of the total.
Outflows in March slid by 1 percent from $1.37 billion in February. Year-on-year, outflows were also 28.7 percent smaller than the $1.91 billion in March 2020. The US received 61.6 percent of total outflows.
“Developments during the month included investor reaction to rising inflation and vaccine rollout amid the surge in virus infection and reimposition of restrictions on mobility in the National Capital Region and nearby provinces,” the BSP said.
Including the first two days of April, foreign portfolio investment transactions in the year to date yielded net outflows of $483.45 million.
The Bangko Sentral said this is lower compared to the $1.48 billion net outflows recorded for the same period last year amid the ongoing impact of the pandemic to the global economy and financial system.
“This has been accompanied by international and domestic developments such as the new US administration, vaccine rollout and the reimposition of additional quarantine measures amid the surge in virus infection,” it added.
Last year, the country posted $4.24 billion in net hot money outflows, wider than the $1.90 billion that left the country in 2019.
This year, the central bank projects $5.7 billion hot money inflows.