Foreign investors trooped back to PH in July
Foreign investors trooped back to the Philippines last month amid optimism over the Aquino administration’s economic agenda and expected recovery of the United States economy, the country’s largest trading partner.
Foreign portfolio investments—or placements in stocks, corporate bonds, and government debt—reached a net inflow of $895 million in July, the Bangko Sentral ng Pilipinas (BSP) said Thursday.
This was better than the $23-million net outflow recorded in June, when foreigners repatriated their funds following hints by the US Federal Reserve on the end of its easy-money policies. Portfolio investments are often referred to as “hot money” because of the speed at which they can enter and exit markets.
The net inflow in July more than offset the net outflow of $663.82 million in the preceding two months.
“Investments rose year-on-year by 17 percent from $2.2 billion due to renewed optimism after the State of the Nation Address (Sona) by President Aquino,” the BSP said in a statement.
In the Sona last month, Mr. Aquino outlined several economic reforms such as the rationalization of fiscal incentives and the relaxation of the “cabotage” law, which currently restricts foreigners from plying interisland shipping routes in the country.
These planned reforms, as well as the crackdown on smuggling that was also highlighted in the President’s speech before Congress, were welcomed by foreign investors as signs of the administration’s seriousness to further strengthen the country’s economic base.
Registered investments for the month reached $2.5 billion. The bulk of these funds went to publicly listed shares, while the remaining went to peso time deposits and government securities.
The registered investments for the month were 11.3 percent lower than June’s figure, but this was mainly due to the one-time block sale of shares in publicly listed Cosco Capital Inc., the BSP said.