Portfolio funds return in August


Portfolio investments, also called “hot” money, flowed inward and strengthened in August alone totaling $225.85 million, the Bangko Sentral ng Pilipinas said on Thursday.

The inbound portfolio funds come on the heels of net inflows totaling only $53.29 million in July when fund manager concerns were elevated due to the weak peso, accelerating headline inflation and increasing pressure for the monetary authorities to make the appropriate policy adjustments.

Gross portfolio fund inflows in August accelerated to $1.12 billion from only $936 million a year ago and only $959.44 million in July this year, indicating renewed opportunities for fund managers to profit from their placements in government- as well as privately-issued debt papers and equity stocks traded openly at the Philippine Stock Exchange.

Gross outflows for the period slowed to only $895.31 million during the month, significantly slower than year-ago gross outflows totaling $993.80 million.

As a result, the eight-month portfolio funds posted net inflows totaling $602 million, a sharp turnaround from net outflows reaching $318.88 million last year.

Gross portfolio inflows totaled $10.717 billion over eight months this year, higher than the year ago gross inflows of only $10.694 billion.

Gross outflows, representing funds taken out from foreign fund manager investments in peso-denominated stocks and bonds and repatriated overseas in US dollars, similarly slowed to only $10.115 billion over eight months this year from $11.012 billion a year ago.

As a result, the BSP reported net portfolio inflows totaling $602 million in the first eight months, a turnaround from net outflows reaching $318.88 million last year.

The BSP said: “Outflows for the month ($895 million) were lower by 1.2 percent and 9.9 percent, respectively, compared to those recorded in July 2018 ($906 million) and August 2017 ($994 million). The US continued to be the main destination of outflows, receiving 81.5 percent of total remittances.

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