Foreign investors, the short-dated variety in this case, proved skittish in the first nine months this year when they pulled out $9.67 billion worth of investments and left for elsewhere, according to the Bangko Sentral ng Pilipinas.
These were the so-called portfolio fund managers, also known as “hot” money managers, who typically invest in peso securities and bonds but sell them quickly at the merest hint of trouble or promise of better yield elsewhere.
According to the BSP, far more portfolio investors withdrew $9.678 billion of their investments in the nine months to September than those who made bets in the Philippines and its near-term future, resulting in the net outflow of $386.8 million.
This was in stark contrast to last year’s portfolio investments which flowed inward on net basis to $221.56 million.
Portfolio funds and their managers are by design opportunistic and generally shunned by economies around the world although their presence are an indication of the economic health of their host countries.
