Manila, Philippines (AP) — Short-term foreign money came into the Philippines in droves in April, a month before the Philippines’ central bank began its tightening cycle.

What’s new

According to data issued Thursday by the Bangko Sentral ng Pilipinas, foreign portfolio investments registered net inflows of $1.4 billion last month. Net inflows show that more volatile foreign capital remained in the country than left.

This was a significant improvement from the $305 million in net outflows in March. Net inflows totaled $1.3 billion so far this year.

Why this matters

Foreign portfolio investments are also referred to as “hot money” since they may easily enter and exit markets, unlike solid commitments such as foreign direct investments. These funds are extremely vulnerable to domestic and global events.

Last month, Asian equities markets were struggling with increasing inflation and central bank interest rate hikes. In the Philippines, inflation reached a three-year high of 4.9 percent in April, still above the BSP’s 2-4 percent objective.

What an analyst says

When contacted for response, Michael Enriquez, chief investment officer of Sun Life Investment Management and Trust Corp., stated that the net inflow was most likely due to “new stock market placements by some of the firms such as Converge.”

“I think investors will have to wait and see how this new administration handles our economy before making large investments,” Enriquez remarked.