'Hot money' inflows to Philippines hit record $1.27bn

Foreign portfolio inflows to the Philippines surged to a 26-month high of 1.27 billion U.S. dollars in January, as strong domestic growth attracted investors. According to data issued Thursday by the central bank, the net inflow of portfolio investments in January more than doubled last year's 586.01 million U.S. dollars, and was the highest since November 2010. In a statement, monetary officials attributed the January performance to positive investor reaction to the Philippines' 6.6- percent economic growth in 2012, the second fastest in Asia, next only to China. Foreign portfolio placements were also driven by reactions to revised growth projections by the International Monetary Fund. Gross inflows amounted to 2.81 billion U.S. dollars, while gross outflows reached 1.54 billion U.S. dollars. Portfolio investments, better known as "hot money", are usually placed on the bond and stock markets. For January, 65.3 percent of investments entered the country's bourse, while 33.6 percent went to government securities.Portfolio inflows were mainly channeled to PSE-listed shares. Investments were mainly sourced from Singapore, the United States, the United Kingdom, Luxembourg and Hong Kong. Outflows, meanwhile, went to the United States.