HOT MONEY FLOW RECOVERS IN MAY
Short-term foreign investments, called “hot money,” recovered in May after two straight months of decline, according to the Bangko Sentral ng Pilipinas (BSP) on June 28.
Hot money, or foreign investments registered with the BSP through authorized agents, recorded a net inflow of $43 million or a recovery from the $312 million and $124.4 million net outflows posted in April 2024 and May last year.
“The $43 million net inflows for May 2024 were an improvement from the $124 million net outflows recorded for the same period a year ago,” the BSP said.
The overall inflows for May reached $1.1 billion, which is 15.2% higher from April’s $914 million. Gross outflows declined to $1.0 billion, for a decrease of 17.6% compared to the $1.2 billion recorded a month earlier.
The hot money were invested mostly in Philippine Stock Exchange-listed securities or 65% percent representing $685 million, and the rest went to peso-denominated government securities.
BSP RETAINS POLICY RATES
The Bangko Sentral ng Pilipinas (BSP) decided to maintain the current policy rate setting despite expectations that inflation may ease by the second semester of the year.
Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said on June 27 that the central bank’s Monetary Board (MB) decided to retain the overnight reverse repurchase (RRP) facility interest rate at 6.5%, while overnight deposit and lending facilities were kept at 6% and 7%, respectively.
He said the MB anticipates price pressures to soften starting at the second half of 2024 as the lower tariffs on rice and the easing of importation of food products will have an affect on local food prices.
“Inflation is moving closer to the midpoint of the 2% to 4% percent target range. The risk-adjusted inflation forecasts have eased to 3.1% for both 2024 and 2025 from 3.8% and from 3.7%, respectively. Based on the BSP’s latest survey of market forecasters, inflation expectations remain well-anchored,” he said.
However, the central bank chief said higher prices of food items other than rice, transport charges, and electricity rates continue to pose upside risks to inflation.
P30 BILLION RAISED FROM REISSUED TREASURY BONDS
The Bureau of the Treasury (BTr) on June 26 awarded its reissued treasury bonds in full, fetching a higher yield and raising P30 billion.
“The Auction Committee fully awarded the reissued 20-year treasury bonds at today’s auction. With a remaining term of 19 years and 11 months, the reissued bond series 20-27 fetched an average rate of 6.86%,” the BTr said in a statement.
The reissued debt paper was originally issued on May 23, 2024 while its maturity date is on May 23, 2044.
Around P30 billion was raised from the auction, oversubscribed by 1.7 times with total tenders amounting to P51.1 billion. However, the BTr rejected P21.097 billion in bids.
The BTR said that since it awarded the reissued T-bonds in full, the total outstanding volume for the series has reached P52.7 billion.
BOI CONFIDENT ON ATTAINING 2024 INVESTMENT TARGET
The Board of Investments (BOI) remains on track to achieving its target approvals this year of P1.3 trillion to P1.5 trillion.
Trade Undersecretary and BOI Managing Head Ceferino Rodolfo said on June 25 that the investment promotion agency (IPA) is optimistic of hitting its target approvals this year despite the global economic headwinds.
He said the official foreign visits of President Ferdinand R. Marcos Jr. and the follow-through trips of Department of Trade and Industry (DTI) officials are crucial to hit this year’s target.
“We gain new (investment) leads for the Secretary’s visit and we also listen to the challenges that they (investors) are facing,” he said in mixed English and Filipino, referring to Trade Secretary Alfredo Pascual.
Earlier, the DTI said it had 231 investment leads amounting to $76.6 billion (P4.5 trillion) as of June 2024.
TOURIST ARRIVALS SEEN REACHING 8.2 MILLION IN 2025
Tourist arrivals in the Philippines next year may exceed the 8.2 million visitors logged before the pandemic, Fitch Solutions’ unit BMI said on June 24.
In a commentary, BMI projected a 32.6% increase in tourist arrivals this year to reach 6.6 million from 5 million arrivals in 2023.
“The 2024 arrivals will be at 81% of the pre-pandemic level in 2019 (8.2 million arrivals),” it said.
“We forecast the Philippines’ arrivals to continue to increase over the remainder of our medium-term forecast period, fully recovering in 2025 as they reach 8.3 million, rising above the pre-pandemic level in 2019,” BMI said.
By 2028, the Philippines is expected to attract 9.4 million tourists, or growing by 14% annually from 2024 to 2028.
(PNA photo by Joan Bondoc)
