More ‘hot money’ leaves country in March

This photo, taken on April 28, 2017, shows dollar and pound notes – REUTERS

More short-term foreigners The Philippines left, compared to what the investment entered in March, againflecting Russia-Ukraine war and uncertainty over monetary policy The United States is being tightened.

Data from Banco Central NG Polypinas (BSP) shows that foreign portfolio investment or “hot money” gave a net outflow of $ 305.08 million in March, down 43.6% from $ 540.97 million. Net outflA year ago

However, from ইন 274.04 million in net it was a reversalflIn February

March 'Hot Money' net outflow is highest in 8 months

March’s net outflow was also the largest after 33 339.7 million in July 2021.

The net outflow of foreign portfolio investments since the start of the Russia-Ukraine war in late February has reflected volatility in international markets, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corporation, in a Viber message.

Tightening the US Federal Reserve’s monetary policy could lead to more hot money flowing out of the Philippines, he added.

The US Federal Reserve last month raised its policy rate by a quarter of a percentage point as part of its warflThe Fed is expected to raise interest rates by 50 basis points at next week’s meeting, Reuters reported.

Investors are also at risk, says John Paolo and Rivera, economists at the Asian Institute of Managementff Sentiment ahead of the May 9 national elections.

“This could be due to investors’ feelings about the impending political landscape as a new administration is about to enter. This could happen again.flMarket and investor attitudes about politics, “he said in a Viber message.

Former Senator Ferdinand R. Marcos Jr. is leading in the pre-election polls, but a Bloomberg poll shows that analysts and investors prefer Vice-President Maria Leonor G. Robredo as the country’s next president.

BSP data showed gross inflHot Money rose 55% to $ 1.277 billion in March from $ 824.23 million a year earlier.

The top five investor economies this month included the United Kingdom, the United States, Luxembourg, Singapore and Hong Kong, accounting for 78.4% of foreign portfolio investments.flow

The bulk of the investment went to holding company securities; Property; Bank; Food, beverages and tobacco; And transportation services. The rest of the peso has been invested in government securities.

Meanwhile, total outflows rose 15% to $ 1.582 billion in March from $ 1.365 billion a year earlier.

For the first quarter, Hot Money posted a net outflow of $ 16 million, down 96.6% from $ 483 million a year earlier.

International development as well as risksff The feeling of impending election is likely to cause concern among foreign investors, Mr Rickafort said.

“For the coming months, more aggressive Fed rate hikes, already more than two months of protracted Russia-Ukraine conflict, some lockdowns in China, as well as election-related uncertainties could be the main reasons for the recovery of the local economy and financial markets.” “She is OK.

BSP expects that Hot Money will give $ 4 billion net inflow by 2022 – Loose Wendy T. Nobel

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