MANILA, Philippines – In the first 5 months of the year, a net total of $543.79 million in foreign portfolio investments flowed out of the economy, according to data by the Bangko Sentral ng Pilipinas (BSP).
This is in stark contrast to the $178 million in net inflows for the January-May period last year.
The BSP attributed this year's result mainly to the lack of inflows.
"While outflows were relatively steady, there was a substantial drop in inflows which may be attributed to continued uncertainties arising from domestic and international developments," the central bank said in a statement last Thursday, June 15.
Beyond these, clashes in Marawi City also erupted on May 23, resulting in the declaration of martial law in Mindanao.
Total inflows for the 5-month period stood at $6.380 billion compared to $7.113 billion in inflows amassed during the same time last year.
Total outflows for the period, meanwhile, hit $6.924 billion compared to the $6.935 billion recorded for the same time last year.
Foreign portfolio investments are often referred to as hot money because these can enter and leave a market very easily, in contrast to the longer-term foreign direct investments.
May portfolio investments
For the month of May alone, net outflows amounted to $24.35 million, a reversal from the net inflows of $51 million in April and the $73 million seen in May last year.
Total registered investments for May stood at $1.5 billion, reflecting a 12.5% increase from the $1.3 billion recorded in April.
Year-on-year, however, inflows declined by 16.8% from $1.8 billion a year ago.
The bulk or 79.1% of the investments registered were Philippine Stock Exchange (PSE) listed securities, which went mainly to holding firms; property companies; banks; food, beverage, and tobacco firms; and utilities.
Another 18.4% went to peso government securities while the remaining 2.5% went to other peso debt instruments.
Transactions in PSE-listed securities and other peso debt instruments yielded net inflows of $103 million and $35 million, respectively, while investments in peso GS resulted in net outflows of $163 million.
The United Kingdom, the United States, Singapore, Malaysia, and Luxembourg were the top 5 investor countries for May, with a combined share of 76.9%.
Meanwhile, the US continued to be the main destination of outflows, receiving 79.2% of total remittances. – Rappler.com