More favorable reviews of the Philippines in recent weeks helped the country stanch the net outmigration of foreign funds in October as short-term capital funds that fled earlier to safer havens have returned, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.
Latest data on foreign portfolio investments (FPIs) showed a net inflow of $59.87 million in October.
FPIs, more popularly known as “hot” or “speculative” money, readily flow in or out of local investment platforms at the slightest change in sentiment.
This development reversed the net outmigration of FPIs in September, when $807.15 million shipped out and went elsewhere. October’s net inflow was also larger than the previous year’s $27.84 million.
Hot money in the Philippines has flowed out on net basis since late August and throughout September, due, according to analysts, to investors wary of putting their money in the Philippines, in the wake of more provocative policy statements coming from President Duterte.
In October, however, gross outflows of $1.57 billion were more than compensated for by inflows during the period, which aggregated $1.633 billion.
The BSP attributed the sentiment swing to more expansive growth forecasts for the Philippines by the various analysts and experts.
“This [higher inflow] was mainly due to brighter growth projections by Moody’s Investors Service for the Philippines, in recognition of the country’s sound macroeconomic and fiscal fundamentals, coupled with renewed investor interest in peso government securities,” the central bank particularly said.
The net inflows brought the 10-month FPI to aggregate net inflows of $1.326 billion. This represented a turnaround from $360.38-million net outflows in the same period last year.
The BSP said the United Kingdom, the United States, Singapore, Malaysia and Luxembourg were the top-5 investor countries for the month, with a combined share to total of 74.1 percent.
The US continued to be the main outmigration destination of foreign funds, receiving 88.4 percent of the total pullout during the period.