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Lowest January hot money inflow in 5 months.
The Philippines has recorded its lowest hot money inflow in five months, with only $80.8 million in January 2021. This is a significant drop from the $1.1 billion recorded in December 2020.
Hot money inflows refer to foreign investments in the country’s financial markets, such as stocks and bonds. These investments are considered “hot” because they can easily be withdrawn or transferred to other countries, making them volatile and sensitive to changes in the global economy.
The decline in hot money inflows can be attributed to several factors, including the ongoing COVID-19 pandemic, political uncertainties, and the recent surge in bond yields in the United States.
The pandemic has caused a significant slowdown in the global economy, leading investors to become more cautious with their investments. The political uncertainties in the Philippines, such as the upcoming presidential elections in 2022, have also contributed to the decline in hot money inflows.
Furthermore, the recent surge in bond yields in the United States has made investments in the Philippines less attractive. As bond yields increase, investors tend to shift their investments to countries with higher yields, such as the United States.
Despite the decline in hot money inflows, the Philippines remains optimistic about its economic recovery. The government has implemented various measures to support the economy, such as the Bayanihan to Recover as One Act and the Corporate Recovery and Tax Incentives for Enterprises Act.
Moreover, the country’s strong macroeconomic fundamentals, such as its low inflation rate and stable currency, continue to attract foreign investors in the long term.
In conclusion, the Philippines’ lowest hot money inflow in five months is a reflection of the current global economic climate. However, the country remains optimistic about its economic recovery and continues to implement measures to support its growth.