Foreign fund managers retained their money in the Philippines in August, despite the volatility in global financial markets, data from the Bangko Sentral ng Pilipinas show.
The Philippines received a net inflow of $225.85 million in foreign portfolio investments or hot money in August, a reversal of the $57.52-million net outflow a year ago, following the positive second-quarter corporate earnings results and the implementation of the government’s infrastructure projects.
The Bangko Sentral said the August net inflow was also significantly higher than the $53.29-million net inflow in July. The figure brought the total net inflows of hot money since the start of the year to $602 million, or an improvement from the $318.88-million net outflow in the same period last year.
Data showed that gross inflows in August reached $1.12 billion, up from $936 million a year earlier, while outflows hit $895 million, down from $993 million a year ago.
The Bangko Sentral said another reason for the net inflow in August was the resumption of trade talks between the US and China which lifted market sentiments.
The United Kingdom, the United States, Singapore, Hong Kong and Luxembourg were the top five sources of foreign funds in August.
About 79.9 percent of investments registered during the month were in listed securities in the Philippine Stock Exchange such as property companies, holding firms, banks, food, beverage and tobacco firms and telecommunication companies.
About 19.4 percent went to peso government securities, while the balance went to other peso-denominated debt instruments and peso time deposits.
Foreign portfolio investments are also called “hot money” because of the ease they are invested in and taken out of the domestic financial markets.
Hot money posted a net outflow of $205 million in 2017, as the total withdrawals reached $16.267 billion, exceeding the $16.062-billion inflows.
