Foreign Investment Strong in the Philippines despite Headwinds

Strong foreign investment has continued for the third straight month with the release of figured by the Bangko Sentral ng Pilipinas (BSP) last week.

Despite global trends pointing towards a great outflow of funds back to the US following the Federal Reserve’s easing of emergency measures, “hot money” in stocks, bonds and other money market instruments posted net inflows of $44 million from net outflows of $85 million in June 2013.

The latest data reflects the risk on stance of portfolio managers in the first half of the year, Bank of the Philippine Islands economist Nicholas Mapa told GMA News Online.

“Last year, we were in the midst of taper tantrum after then Federal Reserve chairman Ben Bernanke announced in May 2013 the central bank will start tapering its asset purchases,” he said. This led to massive sell-offs in emerging markets, such as the Philippines.

“This year is a different story as most are adopting a risk-on sentiment as the Fed delays the hike of its interest rates – enough impetus for fund managers to chase yields in emerging markets,” Mapa said.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s