Metro Manila (CNN Philippines) — Net inflows of foreign portfolio investments into the Philippines quadrupled to U$687 million in the third quarter of 2016, compared to the previous quarter of this year, the Bangko Sentral ng Pilipinas (BSP) said Thursday.
The third quarter figure of net inflows is a “significant improvement” from foreign portfolio investments of US$410 million in the first quarter of 2016, and $170 million in the second quarter, the BSP said in a statement received Friday.
The surge was “due to an initial public offering by an industrial company as well as renewed interest in peso-government securities,” the monetary authority added.
On a monthly basis, September saw a net outflow of $807 million in foreign portfolio investments, but this was offset by the strong net inflow recorded of $1.066 billion and $427 million in July 2016 and August 2016 respectively.
The net outflow of September was due to outflows of $2.08 billion from stocks and bonds which exceeded inflows of $1.27 billion in the same month, the BSP said.
It attributed the outflow in September to lingering uncertainty on the timing of the U.S. Federal Reserve’s next interest rate increase, the Davao City bombing in early September, which prompted President Rodrigo Duterte to declare a state of emergency, and the European Central Bank’s decision to discontinue its bond-buying program.
However, year-on-year, the net inflow of $687 in the third quarter was a reversal of an outflow $1.025 billion in the same quarter in 2015.
The U.K., U.S., Singapore, Malaysia, and Luxembourg were the top five investor countries in September with a combined share of 72.3 percent of foreign portfolio investment inflow.
Foreign portfolio investments, also referred to as “hot money,” have a shorter time frame for investment returns compared to foreign direct investments, which are longer-term.
