SHORT-TERM foreign investments rebounded in February after declining at the start of the year, the Bangko Sentral ng Pilipinas (BSP) reported late on Wednesday.
Foreign investments registered with the central bank via authorized agents — commonly referred to as “hot money” due to the ease by which these can be moved in and out of the country — posted a net inflow of $689 million.
This was a reversal from January’s net outflow of $76 million.
Overall inflows for the month totaled $1.5 billion — 25.3 percent up from January’s $1.2 billion — while gross outflows narrowed to $859 million — 34.5 percent lower — from $1.3 billion.
The funds were mostly invested in peso government securities (61.4 percent or $951 million) and the rest in Philippine Stock Exchange-listed securities (38.6 percent or $598 million) — mainly banks, transportation, holding, property and food, beverage and tobacco firms.
Most of the short-term investments came from the United Kingdom, Singapore, the United States, Luxembourg and Hong Kong, which had a combined share of 89.1 percent.
The US remained the main destination for outflows, accounting for over half at 56.4 percent or $485 million.
Year on year, inflows surged by 127.7 percent from $680 million in February 2023 while outflows dipped by 30.1 percent compared to the year-earlier $1.2 billion.
“The $689 million net inflows in February 2024 are in contrast to the net outflows recorded for the same period a year ago ($549 million),” the central bank noted.
Year-to-date transactions also turned positive at a net $613 million, reversing from the net outflow of $258 million registered in the same period last year.
The BSP tally accounts for funds received by authorized agent banks (AABs). Registration of the investment is only required if the investor or its representative purchases foreign exchange from AABs or their subsidiaries/affiliates for the repatriation of capital and remittance of earnings from the investment.
“Without such registration, the foreign investor can still repatriate capital and remit earnings on its investment, but the FX (foreign exchange) will have to be sourced outside the banking system,” the central bank said.