MANILA, Philippines--There were more foreign portfolio investments withdrawn from than placed in the country in June, the Bangko Sentral ng Pilipinas (the Philippine central bank) said Friday.

The BSP said $589.59 million in "hot" money entered the country in June, but this was lower than the $735.18 million pulled out in the same month.

This translated to a net foreign portfolio investment outflow of $145.59 million in June, a reversal of the $871.41 million in net inflow a year ago.

The June figure brought the first six-month net hot money outflow to $417.38 million. In January to June last year, the BSP reported a net inflow of $2.55 billion.

The central bank said 40 percent of the outflow in the first half represented investments in stocks, 23 percent in government securities and 37 percent in peso bank deposits.

"[The net outflow of foreign portfolio investments] reflected continuing risk aversion due to the expected global economic slowdown and credit crisis, as well as reduced corporate earnings brought about by surging oil and other commodity prices," the BSP said in a statement.

The low inflation environment last year, averaging only 2.8 percent, was credited for the entry of more portfolio and direct investments into the country in the same period.

With inflation registering record highs this year, cautious investors are seen pulling out of the country, the BSP said.

Inflation in June hit 11.4 percent, the fastest pace in 14 years.

Sharp increases in the prices of goods and services force households to focus spending on basic items and reduce their budget for nonessentials. The tightening of consumer spending has been adversely affecting corporate profits, resulting in a bearish equities market.

A weaker global economy also impacts negatively on the earnings performance of companies operating in the country. This is because nearly half of the total corporate income in the country comes from exports.

On a lighter note, the BSP said double-digit inflation would likely last only until the first quarter of 2009. By the second quarter next year, price movements were expected to start stabilize due to the expected slowdown in aggregate demand.