Central bank data show portfolio flows—also known as “hot money” given the ease with which they enter and exit economies—netted $1.13 billion in April, up by 239 percent from $333.43 million in the same month last year.
Gross inflows of foreign hot money for the month amounted to $3.5 billion, while outflows reached $2.38 billion, data further showed.
The latest hot money data pushed the net inflow tally to $2.218 billion as of end-April, up 178 percent from $797.88 million in the same period last year.
Unlike direct investments, hot money flows do not directly strengthen industries. Such portfolio flows are, instead, put into domestic securities and bonds market.
The central bank, however, said the rise in foreign hot money was an indication of improved sentiment on the Philippines after Fitch Ratings gave the Philippines its first investment grade.
On March 27, Fitch raised the country’s credit rating by a notch from BB+ to BBB-, which is the minimum investment grade. It was the first investment grade received by the Philippines from an international credit-rating agency.
The credit watchdog cited favorable macroeconomic fundamentals—such as declining debt burden of the government, rising foreign-exchange reserves, and robust growth of the economy—for its decision. — BM, GMA News
source: gmanetwork.com
