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Foreign fund managers pulled out $231 million in September

Foreign fund managers pulled out their investments from the local financial markets in September 2019, data from the Bangko Sentral ng Pilipinas show.

Foreign portfolio investments or “hot money” posted a net outflow of $231 million in September. Including the first week of October, hot money resulted to a net outflow of $1.3 billion since the start of the year, a turnaround from the $75-million net inflow a year ago.

“Domestic and international developments for the month included the ongoing trade tensions between the US and China, attacks on Saudi Aramco’s oil facilities that triggered the increase in oil prices, the US Fed’s decision to cut rates and the BSP’s decision to cut interest rates a and reserve requirements,” the BSP said in a statement.

About 80.2 percent of investments in September were in securities listed in the Philippine Stock Exchange pertaining to property companies, holding firms, banks, food and beverages, and tobacco firms and transportation companies. The balance of 19.8 percent went into peso government securities.

The United Kingdom, the US, Singapore, Malaysia, and Luxembourg were the top five investor countries last month, with a combined share of 72.3 percent.

Foreign portfolio investments are called hot money because of the ease they are invested in and taken out of the financial markets.

Registration of inward foreign investments with the Bangko Sentral ng Pilipinas is optional under the liberalized rules on foreign exchange transactions. 

Hot money posted a net inflow of $1.2 billion in 2018, a turnaround from the $195-million net outflow in 2017, buoyed partly by the passage into law of the Tax Reform for Acceleration and Inclusion law. 

Topics: foreign fund , Bangko Sentral ng Pilipinas , foreign portfolio investments
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