Foreign portfolio investments soar in September

Foreign portfolio investments or hot money in the Philippines experienced a remarkable resurgence in September, nearly doubling compared to the previous month and reversing a year-long trend of capital outflows. According to the latest data from the Bangko Sentral ng Pilipinas (BSP), net hot money inflows reached $1.03 billion in September, a significant 92.1 percent increase from August's $533.95 million.

This surge not only signifies a recovery from the net outflows of $698 million recorded in September 2023 but also reflects renewed confidence among investors. The gross inflows for the month saw an impressive jump of 84.7 percent, rising to $2.53 billion from $1.37 billion in August, and a staggering 185.2 percent increase compared to the same month last year.

The investment landscape revealed that the majority of the inflows, about 57.5 percent, were directed towards peso government securities, while the remaining 42.5 percent was invested in Philippine Stock Exchange-listed securities. Key sectors benefiting from these investments included banking, holding firms, real estate, transportation services, and the food and beverage industry.

Prominent contributors to this influx of foreign capital included the United Kingdom, Singapore, the United States, Luxembourg, and Malaysia, which together accounted for an impressive 88.4 percent of total inflows.

Although gross outflows also rose by 80 percent from the previous month to reach $1.51 billion, this increase primarily stemmed from profit repatriation and does not reflect a decline in investor confidence. The United States continued to be the primary destination for these outflows.

Cumulatively, from January to September, the Philippines attracted net FDI inflows of $3.02 billion, marking a significant improvement from the net outflows recorded during the same period in 2023. This upward trend underscores the Philippines’ growing appeal as a prime destination for foreign investments, bolstered by a resilient economy and favorable business conditions.