MANILA, Philippines — More foreign portfolio investments flowed into the Philippines for the second straight month in February as the government gradually lifted COVID lockdowns, resulting in the further reopening of the economy, according to the Bangko Sentral ng Pilipinas (BSP).
The net inflow of foreign portfolio investments reached $274.04 million in February, a reversal of the $40.44 million net outflow in the same month last year.
In January, the country also booked a $14.60-million net inflow of hot money despite the reimposition of strict quarantine and lockdown measures as COVID infections surged to daily record highs due to the more contagious Omicron variant.
The mobility restrictions in the National Capital Region (NCR) and nearby provinces have been eased to Alert Level 1 amid the faster rollout of COVID vaccines and declining cases.
Foreign portfolio investments or hot money refer to purely speculative funds that quickly and regularly move within the global financial markets as investors scout for higher short-term yields available.
Data from the BSP showed that the gross inflows of hot money fell by 29.4 percent to $944.51 million in February from $1.34 billion in the same month last year.
A majority, or 79.3 percent, of total inflows went to securities listed in the Philippine Stock Exchange, mainly in holding companies, property developers, banks as well as food, beverage and tobacco.
According to the central bank, the remaining 20.7 percent went to peso government securities.
The United Kingdom, United States, Luxembourg, Singapore and Hong Kong accounted for the bulk or 75.7 percent of the total inflows.
Gross outflows also plunged by 51.3 percent to $670.47 million in February from $1.38 billion in the same month last year.
The United States received 76.5 percent of the speculative funds that were withdrawn from the Philippines.
From January to February, the Philippines yielded a net inflow of $288.54 million or more than five times the $57.48 million booked in the same period last year.
Gross inflows of foreign portfolio investments declined by 26.8 percent to $1.67 billion in the first two months from $2.29 billion in the same period last year, while gross outflows fell by 37.8 percent to $1.387 billion from $2.232 billion.
Last year, the Philippines missed its net inflow target of $1.5 billion as the country registered a net outflow of speculative funds amounting to $574.46 million, 86.4 percent lower than the $4.24 billion net outflow recorded in 2020.
The BSP expects foreign portfolio investments to recover strongly with a net inflow of $4 billion for this year and $6.7 billion next year.