The country's transactions on foreign investments in October resulted in net outflows of $328 million, down from $698 million in September, the Bangko Sentral ng Pilipinas reported.

The net outflows were the result of higher gross outflows of foreign investments worth $1.3 billion compared to gross inflows of $954 million in October.

From January to October, net outflows amounted to $715 million which was a reversal of the $305 million net inflow in the same period last year.

Foreign capital

Foreign investments, such as securities listed with the Philippine Stock Exchange or PSE, are registered with the BSP through its authorized banks. 

Gross outflows of foreign investments in October were lower by 19.1 percent compared to September's $1.6 billion, and included a loss of $794 million to the United States.

It again received the biggest share of outward remittances at 61.9 percent of the total.

Gross inflows increase

Meanwhile, gross inflows increased by 7.5 percent in October as PSE-listed securities dominated other forms of foreign investments at 60.5 percent of the total.

The top investment areas for PSE-listed securities included banks, property firms, holding firms, and those dealing in casinos, gaming, food, beverage and tobacco.

Peso-denominated government securities received the second biggest share of foreign investments at 39.5 percent.

Country source of investments

Investments mostly came from the United Kingdom, United States, Luxembourg, Singapore, and Hongkong.

Michael Ricafort, chief economist of Rizal Commercial Banking Corporation, said inflows of foreign investments could increase in the next months if geopolitical risks dissipate. 

"The Israel-Hamas war started on October 7 initially led to some volatility in the global financial markets. There was some flight to the safest assets havens as a matter of prudence amid also high inflation rates," he explained.

Ricafort said the aggression in the Middle East seemed to be calming down which has reduced risks of investment losses from inflation.

"Financial markets have mostly recovered and erased their losses amid diplomatic efforts by world leaders to prevent Israel-Hamas war from escalating, resulting in global crude oil prices to the lowest in three to four months," he said.