Speculative investments that flowed inward on net basis in 2022 reverted to a net outflow last year when interest-sapping high inflation helped make the Philippines one of the more costly places to make an investment in 2023.
The Bangko Sentral ng Pilipinas (BSP) on Thursday released data showing portfolio funds, more known as speculative funds or “hot” money fleeing the country in 2023 aggregating USD247.3 million, a sharp reversal from net inflows totaling USD886 million.
This meant that far more foreign investments totaling USD13.134 billion fled the Philippines last year than had entered aggregating only USD12.886 billion.
Contrast these numbers the year before when portfolio funds aggregating USD12.344 billion flowed inward on gross basis versus gross outflows of only USD11.457 billion.
According to BSP data, the largest and most pronounced withdrawal of portfolio investments happened in September last year when USD698 million fled the country. This was the period when inflation, having initially scared the pants off portfolio fund managers in January when it averaged 8.7 percent steadily dropped to only 4.7 in July, but resolutely climbed back up and hit 6.1 percent in September when Malacanang announced a price cap on the rice staple and aggravated a situation where vegetable prices already approximated gold.
It also did not help that a senior monetary official flaunted data that fed on the apprehension of a nervous market.
It was such that in December alone the BSP reported net portfolio outflows totaling USD205 million as opportunistic foreign fund managers fled.
During the month, USD564 million or 53 percent were invested in listed stocks at the Philippine Stock Exchange, mostly in banks, holding companies, property, transportation and food, beverage and tobacco companies.
The USD1.3 billion portfolio funds that fled in December last year proved 41 percent larger or USD369 million more than gross outflows of only USD902 million the previous November, the BSP said.
Net outflows of USD205 million in December last year were a reversal from net inflows of USD93 million the year before, the BSP said.
