Volatilities in the local financial sector ramped up in August such that short-term investment gains in the first eight months were decimated during the period.
The Bangko Sentral ng Pilipinas (BSP) said on Wednesday that the country’s foreign portfolio investments (FPI) posted a net outflow in the first eight months as foreign capital fled in search of safer havens.
FPI, more popularly known as “hot,” or speculative money, posted a net outflow of $64.25 million in August this year.
According to BSP data, $14.59 billion representing eight-month inflows proved insufficient to compensate for the $14.66 billion that exited the country during the period.
FPI typically exit emerging markets, like the Philippines, as the merest hint of trouble or the slightest change in global or local sentiment.
The net outflows over eight months, however, proved smaller in volume compared to the $572.83 million net outflows seen in the same eight-month period last year.
In August alone, net outflows totaled $542.54 million, resulting from $1.1 billion in gross inflows against $1.66 billion in gross outflows during the month.
The central bank blamed profit taking among fund managers for the capital flight.
An aggregate 88.7 percent of investments registered in August were ploughed into Philippine Stock Exchange (PSE)-listed securities; 10.8 percent were in peso government securities and the rest were in peso time deposits and other peso debt instruments equal to 0.5 percent.
Investments in the PSE were largely invested in holding firms, banks, property firms, telecommunication companies and food, beverage and tobacco companies.
The top 5 country investors included the United States, the United Kingdom, Singapore, Luxembourg and Hong Kong. These countries have a combined share to total of 82.3 percent.
These countries comprised 82.3 percent of the total investments during the period.
The US remains the destination of choice for those that left, accounting for 81.4 percent of the total.