Portfolio investments in October posted a net outflow of $529.68 million, a reversal from the $1.026 billion inflows in September after previous US presidential election surveys indicated high chances of victory for Donald Trump.

The Bangko Sentral ng Pilipinas’ data showed gross outflows of foreign investments of $2 billion surpassed gross inflows of $1.5 billion, as the volume of hot money lost by the country ballooned by 33.4 percent or $503.49 million.

Most foreign investments were redirected to the United States which received $889.06 million or 44.2 percent of the total outward remittances.

Similarly, the gross inflows of foreign investments plunged by a double-digit at 41.5 percent or $1.02 billion.

The majority or 54.5 percent of investments were equities in Philippine Stock Exchange-listed firms which received a total of $807.08 million.

45.5% peso debt papers

Top recipients of equity investments included banks, holding firms, transportation providers, property developers, and food, beverage and tobacco manufacturers.

Meanwhile, investments in peso-denominated government securities accounted for 45.5 percent and amounted to $672.79 million.

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

Despite the gloomier results for October, BSP reported the country registered net inflows in the first ten months worth $2.5 billion, a reversal of the $715.43 million net outflows in the same period a year ago.

Security Bank Corp. chief economist Angelo Taningco said investors must have taken advantage of short-term optimism on US firms after incoming and re-elected US president Trump promised to boost their production by slashing corporate income taxes to 15 percent from 21 percent.

He also plans to raise tariffs on all imports by at least 10 percent to encourage consumers to buy more US products.

“As tax cuts will be deeper, there will be less government revenues. But the high tariffs on imports will compensate for the tax cuts and the tax cuts will invigorate businesses to spend that will generate earnings,” Taningco said.

Rizal Commercial Banking Corp. chief economist Michael Ricafort added investors preferred US government securities as they anticipated the Federal Reserve to maintain high rates due to inflationary risks from Trump’s economic policies.

He shared US Treasury yields rose to over 4 percent in October among two-month highs as the government posted still high inflation rates due to strong consumption of goods and services from a larger group of income-earning Americans.

Ricafort said foreign investments might increase in the remaining months in the last quarter of the year as low Philippine inflation rates sustain strong private consumption and boost company earnings.

“The lower price tariff and stable oil prices should keep inflation within the central bank’s target. Higher consumption will also be likely driven by holiday spending in December,” he said.