SHORT-TERM investments made by foreign investors to the Philippines climbed back to the net inflow territory in August due to higher investments coming into the country during the month, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday.

The BSP said the total gross inflows of $807 million in August more than offset the $795-million gross outflows for the month, resulting in the net inflow that reversed the net outflows of $340 million recorded in July.

FPI are known as “hot” or “speculative” money because they are easily pulled in and out of the local platforms in the slight change of global and local sentiment.

The BSP attributed the recovery of FPI to various domestic developments during the month, including the improvement in corporate earnings for the second quarter of 2021, the recomposition of Philippine Stock Exchange’s (PSE) benchmark index and the narrowing of the National Government’s fiscal deficit for the month of July 2021.

This was accompanied by the release of data on Overseas Filipinos (OFs) personal remittances for the first half of the year, inflation for July 2021, and gross domestic product (GDP) for the second quarter of 2021.

Other developments that might have influenced investor sentiment during the month on the other side were the reimplementation of strict quarantine measures in selected areas of the country, and the lowering of GDP growth target by the Development Budget Coordination Committee (DBCC).

The $807-million registered investments for August 2021 reflected a 10.6-percent increase compared to the gross inflows of $730 million in July.

About 64.7 percent of investments registered were in listed securities, mainly in food, beverage and tobacco companies, property companies, holding firms, banks and transportation services.

The remaining 35.3 percent went to investments in Peso government securities.

Broken down, the United Kingdom, United States, Singapore, Norway and Luxembourg were the top 5 investor countries for the month with a combined share of 79.3 percent.

The $795-million gross outflows for the month were also lower by 25.6 percent than the $1.1 billion seen in July. The US received 69 percent of total outflows during the month.

The positive August hot money performance of the country brought the total net outflows of the country to $298.56 million in the first eight months of the year.

This is significantly lower than the $4.09-billion net outflows seen in the same January-to-August period in 2020.

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