SHORT-TERM investments made by foreign investors to the Philippines turned positive in November this year, indicating a resurgence of favorable global investor sentiment toward the country for the coming months.
Data from the Bangko Sentral ng Pilipinas (BSP) showed foreign portfolio investments (FPI)—or more popularly known as “hot” or “speculative” money—reverted to the net inflow territory in November after being in the red for two consecutive months.
FPI are usually an indicator of global sentiment toward the economy, as they are the type of dollar investments that are easily pulled in and out of the local platforms in the slight change of global and local developments.
November FPI yielded a net inflow of $832.07 million, as the $1.21 billion in withdrawals for the period was significantly outpaced by the $2.04-billion placements.
This is the second-largest net inflow for the year—next only to March’s $1.1 billion—and a significant development from the $107.7 million seen in the same month last year. The local currency, which is also usually a gauge of sentiment for the economy, also posted a significant recovery in November to average at 52.808 to a dollar, from the previous month’s 54.009 to a dollar average.
It was in November when inflation first started to decelerate to 6 percent, from it 6.7-percent peak in the previous month.
The BSP attributed the positive development during the month to decreasing global oil prices, the BSP’s decision to raise its policy rate; and progress on the rice tariffication bill, all of which are expected to temper inflation.
The Central Bank said Chinese President Xi Jinping’s visit to the country, which was expected to further deepen ties with China in terms of diplomacy and business development, also pushed sentiment to the positive territory.
According to the BSP, about 66.8 percent of investments registered during the month were in PSE-listed securities—pertaining mainly to food, beverage and tobacco companies holding firms, property companies, banks and utilities companies.
The 33.2-percent balance went to Peso government securities. Transactions in Peso GS and PSE-listed securities yielded net inflows of $510 million and $322 million, respectively.
The United Kingdom, Singapore, the United States, British Virgin Islands and Cayman Islands were the top 5 investor countries for the month, with combined share at 83.5 percent.