Foreign portfolio investments or “hot money” flew out of the domestic markets in August as fund managers reacted negatively to both the local and international developments, particularly the lingering trade tensions between the United States and China, the Bangko Sentral ng Pilipinas said Thursday.
Data showed hot money in August posted a net outflow of $392 million, a reversal of the $225.85-million net inflow a year ago.
“Domestic and international developments for the month included the ongoing trade tensions between the US and China, the devaluation of the Chinese yuan, inversion of the US Treasury bond yield curve, heightened protests in Hong Kong and the lower gross domestic product outturn for the second quarter of 2019,” the BSP said in a statement.
The economy slowed to a four-year low of 5.5 percent in the second quarter, weighed down by the delayed approval of the national budget for 2019. The sluggish expansion brought the average growth in the first half to 5.6 percent, below the 6 percent to 7 percent target range.