GLOBAL investors looking for short-term yield remained upbeat on Philippine prospects just before the onset of the so-called Ghost Month for the year, data from the Bangko Sentral ng Pilipinas (BSP) showed.
The latest numbers on the country’s foreign portfolio investments from the BSP show that the Philippines registered its third-strongest weekly performance for the year, just before the formal start of the Ghost Month celebration.
Investors, particularly Asians, are believed to be reluctant in investing during the Ghost Month, as it is believed to bring bad luck. The Ghost Month started on August 11 this year and will end on September 9.
In 2017 the Central Bank blamed this investor belief for the resulting net outflow of FPI for the month.
“Registered foreign portfolio investments in August 2017 [was] down by 34.7 percent and 46.7 percent from figures recorded the previous month and a year ago, respectively, as trading is thin during the Ghost Month [August] because of hesitancy to invest,” the BSP said in its report last year.
This year, in the week ending August 10, however, investors were seen to be keen on putting investments into Philippine shores, as the week alone yielded a net inflow of $111.18 million. This is the third-largest net inflow for a week in 2018.
Last year the August FPIs resulted in a net outflow of $57.52 million, reversing the previous year’s $427-million net inflows and the $206-million net inflows seen in the previous month. FPI are known as “hot” or “speculative” money because they are easily pulled in and out of the local platforms with the slight change of global and local sentiment.
In June this year, the BSP said it was projecting the Philippines would incur a $900-million net outflow of FPI by the end of the year.
From the start of the year up until August 10, however, BSP data show FPI performing better than last year, with a net inflow of $569.73 million during the period, compared to the same period last year that saw a net outflow of $152.75 million. Just last week, Moody’s Investor Service warned of volatile inflows in short-term investments for the Philippines for the year.
“We expect portfolio flows to emerging market countries to remain volatile as monetary policy accommodation in advanced economies is gradually withdrawn. But other flows, including FDI [foreign direct investments] and bank flows, will remain relatively strong overall,” Moody’s said.