Philippines sees record outflow in May

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PesosThe Philippines saw $640.84 million of foreign investment in May 2013 flow out of the country as speculative investors yanked capital from the emerging market due to worries that the US Federal Reserve might end its stimulus programme.

The country’s bank figures show that the speculative “hot money” that left in May stands in stark contrast to the $106.28 million of net inflows recorded in the same month of 2012.

The massive outflow is closely linked to improved jobs data and retail sales released by the US, which may in turn end its bond-purchasing programme, a scheme used to inject large amounts of liquidity into the ailing economy. In the past years, much of that liquidity has spilled over into emerging markets, such as the Philippines, with money managers diversifying through portfolio investments.

However, in the first five months, portfolio investments remained in the positive territory at $1.57 billion, up 74.4 per cent from $904.16 million in 2012.

The Aquino administration also retains a positive outlook.

“I am not concerned because Philippine economic fundamentals are good and improving… The Philippines is much better and stronger than it was in 2008,” Finance Secretary Cesar Purisima said on June 14.

The Philippine Stock Exchange, one of the world’s best performing, nonetheless has begun to quiver, losing 6.75 per cent of its value on June 13 it its worst day since October 28.

On Friday, June 14 the PSE gained 2.18 per cent, closing at 6,242.26.

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The Philippines saw $640.84 million of foreign investment in May 2013 flow out of the country as speculative investors yanked capital from the emerging market due to worries that the US Federal Reserve might end its stimulus programme.

Reading Time: 1 minute

PesosThe Philippines saw $640.84 million of foreign investment in May 2013 flow out of the country as speculative investors yanked capital from the emerging market due to worries that the US Federal Reserve might end its stimulus programme.

The country’s bank figures show that the speculative “hot money” that left in May stands in stark contrast to the $106.28 million of net inflows recorded in the same month of 2012.

The massive outflow is closely linked to improved jobs data and retail sales released by the US, which may in turn end its bond-purchasing programme, a scheme used to inject large amounts of liquidity into the ailing economy. In the past years, much of that liquidity has spilled over into emerging markets, such as the Philippines, with money managers diversifying through portfolio investments.

However, in the first five months, portfolio investments remained in the positive territory at $1.57 billion, up 74.4 per cent from $904.16 million in 2012.

The Aquino administration also retains a positive outlook.

“I am not concerned because Philippine economic fundamentals are good and improving… The Philippines is much better and stronger than it was in 2008,” Finance Secretary Cesar Purisima said on June 14.

The Philippine Stock Exchange, one of the world’s best performing, nonetheless has begun to quiver, losing 6.75 per cent of its value on June 13 it its worst day since October 28.

On Friday, June 14 the PSE gained 2.18 per cent, closing at 6,242.26.

Do you like this post?
  • Fascinated
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