By Melissa Luz T. Lopez
MORE flighty capital entered the Philippines in March to log a three-year high, the central bank noted on Thursday, as foreigners invested in the country’s maiden panda bonds and in local stocks.
Foreign portfolio investments posted a $1.132-billion net inflow last month, turning around from February’s $545.14-million and March 2017’s $459.86-million net outflows, the Bangko Sentral ng Pilipinas (BSP) said.
These placements are dubbed “hot money” since such funds enter and leave the country with ease.
Net investments bagged in March were the biggest since February 2015 which saw $1.19 billion in such inflows, according to central bank data.
Foreign investors placed in $2.469 billion last March, more than double the $1.029 billion a month ago and the $1.374 billion a year ago.
These placements were partly offset by $1.337 billion in outflows that compared to $1.574 billion plucked out in February 2018 but were still smaller than March 2017’s $1.834 billion.
One analyst attributed the pickup in investments to the Philippines’ maiden bond sale among Chinese investors.
“Panda bonds raised about $230 million. So, the third week inflows bump can be attributed to the said inaugural issuance,” said Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines.
The government sold the renminbi-denominated papers on March 20. Mr. Asuncion said the bigger inflow recorded in early March may have been due to corporate bond sales.
Big-ticket securities issued earlier this year include debt papers worth $500 million sold by Petron Corp. and $400 million by port operator International Container Terminal Services Inc.
Investments in peso-denominated debt instruments accounted for more than half of hot money flows to yield $1.2 billion in net inflows, the BSP said. Some 40.9% of foreign funds went to publicly listed firms, for which transactions resulted in $240-million net outflows.
Transactions in peso-denominated government securities accounted for 8.5% and resulted in $122-million net inflows.
The Netherlands, the United Kingdom, the United States, Norway and Hong Kong were the biggest sources of capital during the month.
About 85.9% of the outflows returned to the US.
The BSP expects $900 million in net outflows this year, bigger than the $205.03 million that left the country in 2017.
By Melissa Luz T. Lopez