More hot money flows out in first five months on investors’ negative sentiment
Maricel E. Burgonio
Manila Times
Net foreign portfolio investments went down in January to May this year as risk aversion persisted amid the continuing climb of oil and commodity prices, Bangko Sentral Gov. Amando Tetangco Jr. said in a statement.
Net foreign portfolio investments weakened to an outflow of $271.8 million during the period from the recorded inflow of $1.7 billion last year.
Tetangco said, “the continued spiraling of oil and other commodity prices, the slowdown in economic growth and reports of mixed corporate earnings in the first quarter as well as the weakening of the peso contributed to the negative investor sentiment during the period.”
Net foreign portfolio investments posted an outflow of $158 million in May this year, higher than an outflow $49.9 million in April and lower than the inflows of $581.23 million in May last year.
“This development was brought about by risk aversion following the slowdown in the US and other major economies, the global credit crunch and the record high oil and other commodity prices which dampened expectations on corporate earnings,” the governor said.
Total inflows in May reached $700.4 million, around 91 percent or $634.8 million of which went to shares listed in the Philippine Stock Exchange.
Investments in peso denominated government securities and placements in peso time deposits collectively accounted 9 percent of the balance.
In January to May, total inflows reached $4.660 billion but total outflows reached $4.931 billion, which resulted in total net foreign portfolio outflow of $271 million.
Investments in PSE listed shares posted $973.8 million, while placements in government securities and peso bank deposits registered $12 million and $1.2 billion outflows, respectively.
Inflation rate in May went up to a nine-year high of 9.6 percent from 8.3 percent in April due to escalating oil and commodity prices. This pulled down the country’s economic growth as measured by gross domestic product growth of 5.2 percent in the first quarter of the year.
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