Foreign portfolio investments to the Philippines posted a net outflow in March as concerns over the crisis in the euro zone, punctuated by the debt woes of Cyprus, prompted fund owners to liquefy some of their emerging-market assets.
The Bangko Sentral ng Pilipinas said that the country could expect a surge in foreign portfolio investments because of the United States government’s plan to automatically cut public spending worth $85 billion.
Foreign portfolio investments more than doubled in January as fund owners were encouraged by news that the Philippines could get an investment grade this year, according to monetary officials.
WHILE the global economy struggled through 2012 due to the prolonged crisis in the euro zone and the fiscal problems of the United States, the Philippines appeared like it just came from a refreshing walk in the park.
Foreign portfolio investments in 2012 hit the highest in a decade as the favorable outlook on the Philippine economy boosted demand by foreigners for peso-denominated stocks, bonds and other financial instruments.
The Bangko Sentral ng Pilipinas braces for a possible spike in foreign portfolio investments inflow in the days ahead, which may be brought about by the US Congress’ recent move to prevent the world’s biggest economy from falling into a recession.
The net inflow of foreign portfolio investments to the Philippines shrunk in October due mainly to profit-taking by equity investors, according to the central bank.
The net inflow of foreign portfolio investments to the Philippines nearly tripled in September after global investors’ appetite rose for securities from emerging markets.
The banking sector is not keen on the idea of imposing controls on the entry of foreign “hot money,” saying such measures could scare off investors.
Net inflow of foreign portfolio investments surged in July to the highest in nearly two years as the upgrade in the country’s credit rating led to upbeat sentiment for the Philippines.
Foreign portfolio investments to the Philippines stood at a net inflow of $106.3 million in May—71 percent less than the $364.2 million reported in the same month last year, the Bangko Sentral ng Pilipinas said.
The recent meeting of the Asian Development Bank’s Board of Governors held at the Philippine International Convention Center may trigger the flow of more “hot money” into the country, according to First Metro Investment Corp. and the University of Asia and the Pacific.
