PORTFOLIO funds flowed out on net basis in the first week of October but promptly returned the following week, and at a volume significantly larger than the week before, data from the Bangko Sentra ng Pilipinas (BSP) show.

The quick dash in and out of the market by foreign fund managers in the initial weeks in October mirror events that happened in the first nine months, when fund managers put in foreign money in local stocks and bonds one week but withdrew them just as quickly the week after.

BSP Governor Amando Tetangco Jr. reported on Thursday of “hot money” inflows totaling $229.14 million in the first nine months alone, a reversal from year-ago net outflows of $889.15 million.

 Updated figures show that in the first two weeks of October, the foreign fund managers opted to stay invested in the Philippines as hot- money inflows totaled $162.65 million, also a reversal from year-ago net outflows of $42.70 million.

This resulted in net hot-money inflows of $389.94 million from year-to-date and a turnaround from year-ago outflows reaching $897.83 million.

The quickly changing numbers validate the view that on the whole foreign fund managers are still jumpy as far as investing in emerging market economies like the Philippines is concerned.

Tetangco, however, said that while fund managers tend to remain risk-averse on emerging markets as a whole, they have proven “less risk-averse in recent weeks than before.”

This turn of events, he added, is one factor behind the newfound strength of the peso in recent weeks as the flow of foreign funds tended to favor currencies like the peso, which has proven nearly as stable as the Chinese yuan.

The peso hardly weakened on Thursday, when it averaged just one centavo lower to P47.084 per dollar from P46.984 per dollar the previous Wednesday at the Philippine Dealing System.

The volume of trade remained high as this totaled $996.15 million from Wednesday’s $1.023 billion, an indication of support the local unit gets from resilient remittances and capital flows arising from activities of portfolio fund managers and their foreign direct investor counterparts.