Friday, 16 April 2010

‘Hot money’ inflow up 602% in 1st quarter

Michelle Remo
Philippine Daily Inquirer

NET INFLOW OF FOREIGN portfolio investments into the Philippines grew by 602 percent in the first quarter, reaching $384.75 million from $54.78 million in the same period last year, the Bangko Sentral ng Pilipinas reported Thursday.

Data from the BSP showed that the latest foreign portfolio investment inflows were a result of $1.66 billion in gross inflows and $1.27 billion in gross outflows.

In March alone, net inflows of “hot money” amounted to $76.04 million, up 138 percent from $32 million in the same month last year. The net inflows were a result of the $580 million in gross inflows and $504 million in gross outflows.

Monetary officials said the steep increase in hot money to the Philippines was an indication of foreign investors’ growing optimism toward the country and other emerging economies.

Capital market players said some of the hot money flowed into the country’s stock market.

The increase in hot money inflows, however, has resulted in the appreciation of the peso.

Monetary officials said that even if the peso were to strengthen, this would not necessarily affect Philippine-made goods.

The impact of the rise of the peso on the cost of Philippine exports is being tempered by low inflation, officials said.

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