Foreign fund managers withdrew more than $500 million worth of funds from the local equities and securities markets in October amid global concerns, data from the Bangko Sentral ng Pilipinas show.
The Bangko Sentral said foreign portfolio investments yielded a net outflow of $563 million in October, a reversal of the net inflow of $59.87 million registered a year ago.
The October net outflow in October also offset the $112-million net inflow in September 2017.
Data showed that gross inflows in October reached $1.384 billion, down from $1.633 billion a year ago, while total outflows rose to $1.948 billion from $1.573 billion.
About 89.8 percent of investments in October were in securities in the Philippine Stock Exchange particularly in holding firms, property companies, mining, banks and food, beverage and tobacco.
About 10.1 percent went to peso government securities while the 0.1 percent balance were placed in peso debt instruments and peso time deposits.
The United States, the United Kingdom, Norway, British Virgin Islands, and Luxembourg were the top five investor countries in October.
Foreign portfolio investments, or ‘hot money,’ resulted in a net outflow of $812 million as of Nov. 3, in contrast to the net inflow of $1.5 billion in the same period last year.
“This may be attributed to certain domestic and international developments, including the interest rate hikes by the US Federal Reserve, global terrorist attacks, North Korea’s nuclear missile tests and the closure order for several mining companies in the country,” the Bangko Sentral said.
Foreign portfolio investments are overseas funds that are temporarily invested in local stocks, government securities and money market. These funds are also called ‘hot money’ because of the ease they are invested in and taken out of the local markets.
Portfolio investments posted a net inflow of $404 million in 2016. This year, Bangko Sentral expects hot money to post a net outflow of $900 million.