The country posted net inflows of foreign investments in July at $1.4 billion as most investors placed their funds in government securities, a report by the Bangko Sentral ng Pilipinas (BSP) said.

The BSP said this was an improvement from the $27.3-million net outflows recorded in June based on transactions with authorized banks.

In July, gross inflows of foreign investments reached $2.4 billion which was more than the $1.05-billion gross outflows seen during the period.

Most foreign investors directed funds to peso-denominated government securities with 71.3 percent share of the total registered investments and a transaction value amounting to $1.7 billion.

Equities market, 28.7%

Meanwhile, investments in equities listed with the Philippine Stock Exchange accounted for the remaining 28.7 percent and reached $697.7 million.

The companies which received the bulk of equity investments were banks, holding firms, property developers, transportation service providers, food and beverage manufacturers and tobacco firms.

The majority of investments or 93.7 percent came from the United Kingdom, the United States, Singapore, Luxembourg and Norway.

Meanwhile, gross outflows of foreign investments declined by 1.9 percent in July from the June level. Most investors redirected funds to the United States with 45.3 percent of the total outflows and a transaction value of $475.35 million.

From January to July, the Philippines registered net inflows of $1.5 billion, higher than the $1.3 billion seen in the same period last year.

HSBC economist Aris Dacanay said company earnings might improve in the last quarters of the year as the BSP projects lower inflation rates toward 3.3 percent by year-end and 2.9 percent in 2025.

“Yes, consumption momentum has waned due to high interest rates and inflation, likely leading to below-potential growth,” he said.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said US-based investors might gain extra funds as the Federal Reserve is expected to cut its policy rate soon.

“The future rate cuts by the US Federal Reserve could be matched locally to maintain healthy interest rate differentials for foreign investments,” he said.

“It is widely expected that the Federal Reserve might start cutting rates by at least 0.25 percentage point in September,” Ricafort continued.