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PORTFOLIO investment, more known as speculative or “hot”
money, poured inward in such volume the past 10 months
it already pushed past last year’s net inflows totaling
$3.205 billion.
As at
October 26, portfolio inflows already reached a total of
$3.651 billion, or 97 percent higher than the year-ago
total of only $1.847 billion, Bangko Sentral ng
Pilipinas (BSP) data show.
Such
flows also helped push stock- market prices 28.3 percent
higher in peso terms and 47.5 percent higher in
US-dollar terms at end-November.
The BSP
reported gross portfolio flows surging 130 percent
higher this year to $13.295 billion, the foreign fund
managers having been lured by the country’s continuously
improving macroeconomic numbers and far cheaper equity
prices than those obtaining elsewhere.
Gross
portfolio inflows for the period last year amounted to
only $6.058 billion.
Rey G.
David, president and chief executive at the state-owned
Development Bank of the
Philippines,
said such flows have been unidirectional
in the sense that there had virtually been no foreign
fund outflows the past many months.
“Except
for the foreign tourists who have run out of cash and
the oil companies who need it for the purchase of the
commodity, there is hardly any dollar outflows we can
speak of,” David said in a telephone interview.
As a
result, he quickly added, the country’s stock of foreign
currency reserves rose to record-high levels totaling
$32.4 billion as of October.
There
had been gross outflows totaling $9.643 billion during
the period, but this paled in comparison to gross
inflows hitting $13.295 billion, data show.
The
“hot” money inflows, in conjunction with foreign direct
equity and the remittance activities of millions of
overseas Filipino workers, helped dampen the punitive
impact of the surge in oil prices, which threatened to
stay above $100 per barrel very briefly.
More
important, the BSP said, the influx of foreign funds
helped stabilize prices, particularly for November when
food-related items as well as oil caused inflation to
move significantly higher compared to October.
Inflation averaged 3.2 percent in November, or past the
high mark of only 3.1 percent forecast by BSP Governor
Amando M. Teteangco Jr.for the period; and the fourth
time inflation moved up the scale this year. |
