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By Maricel E. Burgonio, Reporter
FOREIGN investments in local stocks and other
peso-denominated financial assets returned last month after leaving
the country in August when a housing sector-led credit crunch hit
the United States.
In a statement, the Bangko Sentral ng Pilipinas
(BSP) said foreign portfolio investments recorded a net inflow of
$38.2 million in September, reversing August’s net outflow of
$264.4 million.
“Despite setbacks caused by the US sub prime
mortgage crisis and some concerns on the political front, strong
macroeconomic fundamentals and generally solid corporate performance
have sustained positive foreign investor sentiment in the
Philippines during the period,” BSP Governor Amando M. Tetangco
Jr. said.
Local monetary authorities attributed this to
the easing of inflation to 2.4 percent in August from 2.6 percent in
July, the cut in the US Federal funds rate by a larger-than-expected
50 basis points, and the P13.9-billion government budget surplus
last month, which was reported mid-September.
Investors also reacted positively to the Asian
Development Bank’s (ADB) economic growth forecast upgrade for the
Philippines to 6.6 from 5.4 percent earlier.
For the first nine months of the year, foreign
portfolio investments and capital repatriations or outflows totaled
$12.2 billion and $8.8 billion, respectively, for a net inflow of
over $3.4 billion. This net inflow was 2.4 times more than the
$1.4-billion net inflow for the comparable period last year.
On a gross basis, registered foreign portfolio
investments in September alone reached $930.0 million, 81 percent of
which were invested in shares listed at the Philippine Stock
Exchange (PSE). Year-to-date gross inflows were 142 percent more
than the total for the comparable period last year, while gross
outflows of $8.8 billion for the period were likewise 142 higher
than last year’s figure.
Investments in PSE-listed shares of $10.1
billion comprised 83 percent of the total inflows and represented
almost thrice the comparable amount last year. Over 74 percent of
investments in said shares were distributed among property,
telecommunication, utility and holding firms.
Another $1.9 billion or 16 percent of the total
inflows were invested in peso-denominated government securities,
primarily fixed income Treasury notes, while a little over one
percent of the investments were placed in money market instruments
and peso bank deposits.
The United Kingdom, the US and Singapore were
the top sources of portfolio inflows during the period.
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