DESPITE POLITICAL JITTERS 'HOT MONEY' INFLOW DOUBLES TO $172.3-M
MANILA, May 13 , 2004 (STAR) By Donnabelle L. Gatdula - Despite political jitters prevailing over the past few months, foreign investors continued to pour in so-called "hot money" into the country, data from the Bangko Sentral ng Pilipinas (BSP) showed.
Based on the regular foreign exchange portfolio investment report of the BSP, the country recorded a net inflow of $172.3 million for the first four months of 2004, double that of the $85.5 million net inflow in the same period last year.
This as total foreign portfolio investment for the January-April period amounted to $754 million, as against $253.5 million in the comparative period in 2003.
Investment outflows, on the other hand, reached $581.7 million for the same period, thus bringing the net inflow to $172.3 million.
Moreover, the four-month net inflow was more than one-fourth of the total $675.8 million inflow recorded for the whole of 2003.
Analysts said the inflow level for the past four months indicate that investors have remained confident that monetary authorities will maintain the its policy on interest rates which have remained attractive to investors.
Hot money refers to funds coming into the country in the form of investment in the stocks, bonds, and money market instruments on short-term basis.
On a month-on-month basis, net inflow for April 2004 almost tripled to $70.8 million as against $16.8 million in March. April’s net inflow was also higher than the $50.5 million inflow recorded in the same month last year.
The net foreign portfolio investments were based on the data gathered from the country’s five largest custodian banks – ING Bank, Citibank, HSBC, Standard Chartered Bank and Deutsche Bank.
Reported by: Sol Jose Vanzi
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