Metro Manila (CNN Philippines, November 25) — Foreign portfolio investments departed from the Philippines anew in October as investors continued to face global and local market uncertainties, Bangko Sentral ng Pilipinas data published on Thursday show.
Such investments, referred to as “hot money” for the quick pace they enter and exit the economy, registered net outflows of $221.11 million during the month.
The highest since July’s $339.7 million tally, October’s figure also represents a stark contrast from the $439.46 million inflows netted in the same month last year.
Gross outflows amounted to $1.17 billion during the period, according to the BSP, adding that they mildly eased from $1.21 billion in September.
The central bank reported $949.58 million in registered investments this October, also falling from the $1.18 billion logged the month before.
Majority of these outlays were in Philippine Stock Exchange-listed securities, with foreigners investing mainly in food, beverage and tobacco, property, banks, holding firms, and information technology, while the rest were placed in peso government securities.
RCBC chief economist Michael Ricafort told CNN Philippines lingering inflation concerns due to global supply chain disruptions contributed to volatility in financial markets worldwide.
“Global and local market volatility also due to Fed’s tapering of bond purchases/quantitative easing as may be justified by elevated inflation, thereby leading to sell off in the US/global bond markets during the month,” he explained.
Ricafort added that more aggressive signals from the United States Federal Reserve, along with more expensive oil prices amid supply-side disruptions as winter nears, have led to a weaker performance of the peso in October.
Still, the economist said figures concerning hot money could improve in the months ahead with efforts to further re-open the economy and the government ramping up fund-raising activities this November and December.
