Economics Readings Site By Colin Ong

HighBeam Research

Title: Philippine hot money inflow in Jan-August hit 182 mln USD

Date: September 10, 2009 Publication: Xinhua News Agency

Philippine hot money inflow in Jan-August hit 182 mln USD

MANILA, Sept. 10 (Xinhua) -- Philippine foreign portfolio investments posted a net inflow of 182 million U.S. dollars in the months of January to August, a reversal of the net outflow of 46 million U.S. dollars registered in the same period last year, the Philippine central bank reported Thursday.

The central bank said positive fundamentals -- including easing interest rates, steady inflow of remittances from overseas Filipino workers and lower inflation levels -- boosted investors confidence and raised portfolio investments in the Philippines.

Gross investment inflows were recorded at 4 billion U.S. dollars, with the United States, the United Kingdom, Japan, Singapore and Luxembourg as the top five investor countries, which collectively contributed 81 percent of total funds received. In the month of August alone, transactions in foreign portfolio investments registered with the central bank resulted in a net outflow of 83 million U.S. dollars. This is a reversal from the net inflow of 66 million U.S. dollars recorded in the previous month. .

"Investors were less aggressive during the so-called 'ghost month' as investors cashed in on gains from previous market rallies to reposition their portfolio for the next month," the central bank said in a statement.

Buddhists, Taoists and followers of Chinese folk religions regard the month of August as "ghost month" - a time when spirits of deceased ancestors "visit" the living. This is considered as most ill-fated time of the year which is why people decline making important activities and decision during this month.

Registered foreign portfolio investments in August fell 26 percent month-on-month to 385 million U.S. dollars. About 88 percent of these investments were in listed shares while the others went to peso-denominated government securities. Total outflows, which were largely in the form of withdrawals from interim peso deposits, rose 4 percent to 468 million U.S. dollars.