Stocks rally fuels hot money outflows in October — BSP
Foreigners who profited from stocks trading went to reap the gains that month.
Foreign firms decided to pull out $1.95 billion in portfolio investments they had in the Philippines for October, surpassing the $1.38 billion which they placed in the country, according to the Bangko Sentral ng Pilipinas (BSP). This resulted to a $563.4 million net outflow for the month, the biggest in almost a year.
Profit-taking drove investors to decide to remove their funds from the Philippines and bring them back home or to bet elsewhere, the central bank said. This came despite continued “investor optimism” as they expect the tax reform program to be passed.
Outflows from the Philippine Stock Exchange (PSE) reached a whopping $513 million, while those from peso government securities amounted to $47 million.
The PSE index rallied in October to set new highs and tested the 8,500 level.
Most of the capital removed from the Philippines went to the United States, which also happens to be the biggest investor country for the month.
Year-to-date portfolio outflows reached $812.17 million, the BSP said, compared to a $1.47 billion net inflow during the same time last year.