The Bangko Sentral ng Pilipinas (BSP) expects foreign portfolio investments to simmer down to below $1 billion next year from an estimated full-year net inflow of $3 billion this 2009.

A BSP official said the lower net inflow is because of lower domestic borrowings of local corporations.

As of end-October hot money was a net inflow of $358 million, reversing the $1.3 billion net outflow the same period in 2008. Total gross foreign portfolio investments amounted to $5.4 billion.

There were a number of big companies that borrowed heavily this year to repay past debts and to fund expansion plans. The biggest was San Miguel Corp. which raised P38 billion so far.

BSP does not expect as much corporate borrowings next year since most private bond issuers have already raised enough capital in the last months to take advantage of lower rates.