Net hot money inflows surge to $1.38 billion in July

The Philippines experienced a significant increase in net hot money inflows, reaching $1.383 billion in July, marking the highest level of foreign portfolio investments recorded by the Bangko Sentral ng Pilipinas (BSP) for the year. This surge surpasses the $961.58 million reported during the same month last year and reverses the modest net outflow of $27.26 million seen in June.

According to BSP data, July’s inflows were supported by increased speculative investments in government securities and the stock market. The BSP reported gross inflows of $2.432 billion for July, while gross outflows totaled $1.049 billion. Both figures represent an increase compared to the same period in 2023, when gross inflows were $1.576 billion and gross outflows were $614.93 million.

Hot money refers to foreign investments registered with the BSP through authorized agent banks (AABs). These short-term investments are typically placed in listed securities, government securities, peso-denominated time deposits with a minimum tenor of 90 days, unit investment trust funds, Exchange Traded Funds, and Philippine Depositary Receipts.

From January to July 2024, net hot money totaled $1.454 billion, a notable increase from $81.26 million during the same period last year. During this timeframe, gross inflows amounted to $9.767 billion, while gross outflows reached $8.312 billion.

In July, 71.3 percent of registered investments, or $1.734 billion, were allocated to peso-denominated government securities. The remaining 28.7 percent, equivalent to $697.67 million, were invested in listed securities, including stocks from banks, holding firms, property, transportation services, and the food, beverage, and tobacco sectors.

Foreign portfolio investments primarily came from investors based in the United Kingdom, the United States, Singapore, Luxembourg, and Norway, accounting for 93.7 percent of the total.

The BSP has projected that net hot money inflows for the year could reach $3.1 billion, surpassing the $600 million recorded in 2023. For 2025, the BSP forecasts a decrease to $2.2 billion in net hot money inflows.