Hot money posted its third consecutive month of inflows despite an increase in gross outflows in August, according to data released by the Bangko Sentral ng Pilipinas (BSP).
The data showed transactions on foreign investments registered with the BSP, through authorized agent banks (AABs) or hot money, recorded net inflows of $153 million in August 2023.
This exceeded the $86.29 million-worth of outflows posted in August 2022. However, the data for August 2023 was smaller compared to the net inflows worth $962 million in July 2023.
BSP said hot money gross outflows reached $1.3 billion in August, 109.5 percent or $673 million higher than the $614 million posted in July 2023.
“The US remains the top destination of outflows, receiving $762 million or 59.2 percent of total outward remittances,” BSP said.
The data also showed that $1.4 billion registered investments for the month are lower by $136 million or a growth of 8.6 percent compared to the $1.6 billion recorded in July 2023.
BSP said majority or 74.2 percent amounting to $1.1 billion of registered investments were in Philippine Stock Exchange (PSE) listed securities.
“Most of which were investments made in banks; property; holding firms; food, beverage and tobacco; and transportation services,” BSP said.
The remaining were in Peso government securities worth $372 million or 25.8 percent of the total and in other instruments, which represented less than 1 percent of the total.
Investments for the month mostly came from Japan, the United Kingdom, United States, Luxembourg, and Singapore with a combined share to total at 88.9 percent.
Year-on-year, registered investments in August 2023 are higher by $649 million or 82 percent than the $792 million recorded in August 2022.
Gross outflows increased by $409 million or 46.6 percent higher than the gross outflows posted in August 2022 at $878 million.
The $153 million net inflows in August 2023 were a reversal from the $86 million net outflows recorded for the same period a year ago.
“Year-to-date transactions—01 January to 31 August 2023—for foreign investments registered with the BSP, through AABs, yielded net inflows of $311 million which is smaller compared to the $589 million net inflows noted for the same period last year,” BSP said.
The registration of inward foreign investments delegated to AABs by the BSP is optional under the rules on foreign exchange (FX) transactions.
It is required only if the investor or its representative will purchase FX from AABs 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 its investment but the FX will have to be sourced outside the banking system.
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