Angelo Taningco
Economist, Treasury Group

Foreign portfolio investment (FPI) net flows turned negative in May as FPI reverted to net outflows worth $24 million for the month after recording net inflows of $51 million in April, according to the Bangko Sentral ng Pilipinas (BSP) latest FPI data released on 15 June. This led the cumulative FPI net outflows to increase to $540 million over the January-May period.

Figure: Foreign Portfolio Investment Flows
Jan. 2015 – May 2017
($ million)

 
The monthly turnaround stems from FPI gross outflows increasing 19.0% month-on-month (mom) to $1,509 million, outweighing the 12.5% mom rise in FPI gross inflows, which totaled $1,485 million for the month. This is the third month for the year that FPI succumbed to a net outflow position.

By type of instrument, net outflows from government securities worth $163 million were evident in May and this outweighed the combined net inflows in Philippine Stock Exchange (PSE)-listed securities ($103 million) and in other peso-denominated debt instruments ($35 million). We posit that expectations of rising interest rates and bullish sentiment towards equities were likely to have contributed to the net outflow (inflow) position on government securities (PSE-listed securities).

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