The Bangko Sentral ng Pilipinas (BSP) released the foreign portfolio investments yield net inflows for 2016 on Thursday. Foreign portfolio investments or hot money are referred to as speculative funds controlled by investors who actively seek short-term returns and high-interest rate investment opportunities.

Here are three fast facts on the 2016 Foreign Portfolio Investments Yield Net Inflows:


1. BSP said that that the foreign portfolio investment transactions for 2016 yielded net inflows of US$354 million (P17.56 billion). This was in sharp contrast to the US$600 million net outflows noted for 2015.

BSP listed the following drivers of the foreign portfolio investments: a) an initial public offering by an industrial company; (b) investments in shares of two (2) holding companies and a universal bank; and (c) renewed interest in Peso government securities (GS).

Registered foreign portfolio investments for the year aggregated US$17.6 billion (P873.2 billion), 11.8 percent lower than the US$19.9 billion (P987.38 billion) level of the previous year.

2. Outflows for the year of US$17.2 billion (P853.37 billion) were 16.1 percent lower compared to the US$20.5 billion (P1.17 trillion) in 2015.

About 96.8 percent of total outflows represented capital repatriation while the remaining 3.2 percent pertained to remittance of earnings.  The United Kingdom, the United States, Singapore, Luxembourg, and Hong Kong were the top five (5) investor countries during the year, with combined share to total of 76.7 percent, while the United States continued to be the main destination of outflows, receiving  83.1 percent of total.

3. Analysts said that outflows are expected to increase this year due to the interests rate hike in the US as well as the President-elect Donald Trump’s possible implementation of new economic policies.

Guian Angelo S. Dumalagan, market economist at the Land Bank of the Philippines, said that Trump’s promise for a stronger US economy and the interest rate hike already implemented by the US Federal Reserve could attract US investments to the US.

Net inflows, however, can sustain. “Likely firm domestic economic activity could invite foreign investors to participate in and profit from the country’s solid growth momentum,” The Manila Times reported Dumalangan, as saying.

“Net inflows can be sustained this year, especially if the deficit spending program of the government will accelerate and the overall business environment becomes more conducive for foreign investors,” Business World reported Angelo B. Taningco, Security Bank economist, as saying.

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