MANILA, Philippines — The Philippines continues to be an investment magnet, the country’s central bank chief said Thursday in response to the reported exodus of fund managers amid worries over “monetary policy and strongman president.”
Citing an analysis conducted by Copley Fund Research, London-based newspaper Financial Times last week reported that 83 percent of foreign funds have slashed their exposure to the Philippines over the past year.
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The report said that while stock-specific factors partly stoked the flight, fund managers are concerned over the perceived slowness of the Bangko Sentral ng Pilipinas in tightening monetary policy and controversial policies of Philippine President Rodrigo Dutere.
In a statement reported by ABS-CBN News, BSP Governor Nestor Espenilla said the Philippines is still a “solid” choice for foreign investors.
He also expressed hope that fund managers would change their mind “once they realize the Philippines remains a solid investment opportunity with a strong growth story and considerable upside."
"The BSP conducts monetary policy based on what we think is best for our economy," Espenilla was quoted as saying. "It’s too bad if a number of these funds currently find our investment profile to be incompatible with their profit goals.”
Registered foreign portfolio investments—also known as “hot money” as they enter and exit the country with ease unlike firmer commitments like foreign direct investment— yielded net inflows of $53 million in July amid investors’ anticipation of good second quarter corporate earnings results, BSP data show.
The BSP expects a net outflow of foreign portfolio investments amounting to $900 million this year. — Ian Nicolas Cigaral