Portfolio funds, or
hot money, rose to US$ 6.45 billion as of Sept. 17 this year, up 51 percent from the US$ 4.27 billion a year ago.
Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. welcomed this flow of foreign funds that helped the BSP build its gross international reserves (GRI) of more than US$ 49 billion today.
But some analysts warned against possible complications arising from such inflows in monetary policy terms, fearing such could lead the BSP and other central banks in the region to adjust current monetary policy settings sooner than would otherwise be warranted.
An upward adjustment at this point to prevent inflationary pressures from gathering steam would only serve to heighten the foreign inflows even more as domestic interest rates shoot up.
But Tetangco ruled out the likelihood, pointing out loan demand is such that increased foreign flows of the magnitude observed in recent months “could be safely accommodated†without resorting to a monetary policy adjustment.
Hot money gross outflows increase by only about half to US$ 5.26 billion during the period from only US$ 4.82 billion last year.
This enabled portfolio funds to flow inward on net basis to US$ 1.19 billion from year to September 17, which was almost 14 times larger than year ago net inflows of just US$ 89 million. (PNA)
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