Philippines Sees $4 Billion 'Hot Money' Outflow in H1 Amid Global Uncertainty

MANILA, Philippines — Foreign investors pulled more money out of the Philippines than they brought in during the first half as global uncertainty, elevated oil prices and geopolitical risks drove investors toward safer dollar assets. Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that foreign portfolio investments registered through authorized agent banks swung to a net outflow of $4.01 billion in the first half, reversing the $1.54-billion net inflow recorded a year ago. These investments are commonly referred to as “hot money” because of the ease with which the funds enter and leave financial markets in response to domestic and global developments. Based on BSP data, gross outflows surged by 65.4 percent to $17.25 billion from January to June, significantly higher than the $10.43 billion that left the country in the same period last year. Meanwhile, gross inflows increased by 10.6 percent to $13.24 billion from $11.97 billion. The first-half net outflow was driven by withdrawals from both government securities and shares listed on the Philippine Stock Exchange. Government securities posted the larger net outflow at $2.19 billion, while PSE-listed securities recorded a net outflow of $1.81 billion. Robert Dan Roces, vice president and group economist at SM Investments Corp., said the sharp reversal reflected investors’ response to external developments rather than concerns specific to the domestic economy. “The first-half outflow was driven more by global uncertainty than by the Philippine economy itself,” he said. “Many investors simply chose to keep more money in dollar assets while markets were dealing with higher oil prices and geopolitical risks.” Despite the weak first-half result, the country posted a higher net inflow in June compared with a year earlier. Foreign portfolio investments yielded a net inflow of $170.12 million during the month, more than nine times the $18.34-million net inflow recorded in June 2025. Gross inflows jumped by 51.5 percent to $2.94 billion from $1.94 billion a year ago, while outflows climbed by 44.1 percent to $2.77 billion from $1.92 billion. June marked the second straight month that registered foreign investments posted a net inflow following four months of volatile movements at the start of the year. The $170-million net inflow in June was supported by government securities, which generated a net inflow of $540 million. This more than offset the $370-million net outflow from PSE-listed securities. Roces said the improvement reflected an easing in investor caution, allowing foreign funds to return to Philippine government bonds. However, he said foreign portfolio investments would likely remain volatile because investors can quickly move funds across markets as economic and financial conditions change. “Portfolio flows are expected to swing from month to month because these are among the fastest-moving investments,” he said. “The key here is not to overreact to one month’s data but to watch whether global conditions become more stable,” Roces added. Information source: Philstar Business