Foreign capital in PH grows

MANILA, Philippines–Foreign money in the Philippines increased slightly at the end of last September as investors continued to make bets in the local equity market despite volatility in global markets.

Data on the country’s international investments position, released by the Bangko Sentral ng Pilipinas (BSP), showed that the amount of foreign capital in the country grew, with confidence bolstered by the country’s strong economy.

“This is on the back of the continued confidence of foreign investors in the country’s strong macroeconomic fundamentals,” the BSP said in a statement.

As of end of September, the country posted a net liability position of $51.4 billion. This was higher by $1 billion than the end-June 2014 level of $50.4 billion as the increase in the country’s total external financial liabilities (by $1.7 billion) exceeded the increase in total external financial assets (by $600 million).

Investments by foreigners in the country are expressed in the report as liabilities because sooner or later, these investors will pull out to pocket their profits.

The net liability position means more foreign money is invested in the country than the total amount of investments made by Filipinos overseas.

The total outstanding external financial liabilities reached $191.3 billion as of the end of September 2014 from $189.6 billion as of the end of June 2014, while total outstanding external financial assets reached $139.8 billion from $139.2 billion.

“This reflected the improved performance of the domestic equities market, contributing to the appreciation of the value of domestic assets that were held by non-residents,” the BSP said.

Publicly listed shares attracted the most foreign investments, accounting for 26.7 percent of the total. Training in second were investments in equity capital of privately held firms at 24.6 percent.

Foreign loans accounted for 20.7 percent, while foreign investments in local bonds and notes issued by the government and the private sector accounted for 16 percent of these foreign obligations.

As for investments in other countries made by Filipinos, which are expressed as domestic claims abroad, the bulk of the amount was held by the BSP itself in the form of foreign exchange reserves, accounting for 57.2 percent.