Net portfolio investments hit $415 million as of December

MANILA, Philippines – Foreign portfolio investments posted a net inflow of $415.3 million as of Dec. 19 as foreign investors remained upbeat on the Philippine market, data from the Bangko Sentral ng Pilipinas (BSP) showed.

The figure was a complete turnaorund from the $1.77 billion net outflow registered in the same period last year or during the height of the financial crisis in the US.

Inflows amounted to $6.2 billion as of Dec. 19 or 24.7 percent lower than the $8.24 billion inflows registered in the same period last year.

Major sources of portfolio investments during the period were the US, the United Kingdom, Singapore, Japan, and Luxemburg.

BSP officials said foreign investors remained upbeat on the Philippine market on account of the sustained growth in overseas Filipino remittances and gross international reserves (GIR).

The BSP now sees the country’s GIR hitting a new record high of between $44.5 billion and $45 billion instead of $43 billion to $44 billion this year with the disbursement of additio-nal loans from multilateral lending agencies.

The GIR is the sum of all foreign exchange flowing into the country and the balance of payment position is the remaining balance net of all external payments for debt servicing and imports.

Latest data from the BSP showed that the GIR hit a new record high of $43.73 billion in end-November or about $500 million higher than the $43.2 billion registered in end-October.

The current reserves could cover 8.1 months of imports of goods and payments of services and income. It is also equivalent to 9.2 times the country’s short-term external debt based on original maturity and four times based on residual maturity falling due in the next 12 months.

The officials also cited stable prices and interest rates helping erase the impact of the deterioration in the country’s fiscal position and drop in export receipts.

Statistics showed that outflows reached $5.79 billion as of Dec. 19 or 42.2 percent lower than the $10.01 billion portfolio investments that were pulled out of the Philippines in the same period last year.

The outflows consisted mainly of withdrawals from interim peso deposits wherein the US accounted for about 95 percent of the outward remittances.

The BSP sees a net inflow of $3 billion instead of only $600 million this year from a net outflow of $1.78 billion last year. Last year, investment outflows amounted to $10.1 billion versus an inflow of $8.32 billion in 2007. –Lawrence Agcaoili (The Philippine Star)