The country posted net inflows of portfolio investments or hot money worth $96.59 million in November, a reversal of the $529.68 million net outflows recorded in October, data from the Bangko Sentral ng Pilipinas (BSP) revealed.

As a result, BSP data showed foreign investments in the first 11 months resulted in net inflows of $2.6 billion, a reversal of the $43.66 million net outflows seen in the same period a year ago.

In November, gross inflows of foreign investments rose by 25.8 percent to $1.7 billion from $1.5 billion in October.

BSP said most investors parked funds in government securities amounting to $1.4 billion, representing 71.4 percent of all foreign investments.

The remaining 28.6 percent consisted of equity investments in firms listed with the Philippine Stock Exchange which received a total of $531.71 million.

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

Investments mostly came from the United Kingdom, Singapore, the United States, Luxembourg, and Norway which represented 90 percent of all country sources.

Meanwhile, outflows of foreign investments declined by 12.2 percent to $1.8 billion from $2 billion between October and November.

Good growth outlook

The United States remained the top destination of outflows, receiving $914.20 million or 51.8 percent of total outward remittances.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said investors took advantage of anticipated economic growth of the Philippines, following favorable inflation outlooks from the BSP and global institutions.

The Philippine Statistics Authority reported overall inflation dropped to 1.9 percent in September from 3.3 percent in August as rice prices declined, which signaled manageable inflation in the near future and prompted the BSP to ease its policy rate by 25 basis points to 6 percent in October to drive higher consumption of goods and services and company earnings.

“The BSP Monetary Board expects domestic economic growth to continue to be strong. This reflects improved prospects for household income and consumption, investments, and government spending, which are supported by the start of the monetary easing cycle in August,” BSP Governor Eli Remolona Jr. said.

The International Monetary Fund estimated the country’s inflation to settle at 3.2 percent this year, 2.8 percent in the next, and 3 percent in 2026 which are all within the government’s target band of 2 to 4 percent.

Maria Theresa Marcial, president and chief executive officer at Bank of the Philippine Islands Wealth, the assets manager of the Ayala-owned bank, said investors will be diversifying investments as economists see interest rates falling in the near future.

“Deposit rates have started to go down, so fixed-income investors will start looking at other options. But, of course, there will always be risks like geopolitical factors,” she said.

“We’re seeing markets becoming more buoyant. Bonds are going to do better because interest rates are lower and in equities, we’re seeing renewed interest,” Marcial continued.