Philippine Hot Money Posts $4 Billion Net Outflow in First Half

In June alone, net inflows were $170.12 million, up sharply from $18.34 million a year earlier, though they fell from May’s $232.46 million. Asuncion said the positive June figure suggested that “foreign investors continued to see opportunities in Philippine financial assets despite a challenging global environment.”

Gross inflows for June hit $2.94 billion, a four-month high. Outflows were $2.77 billion, also higher than the $1.92 billion recorded in June 2024. Asuncion attributed the rise in both directions to “portfolio rebalancing, profit-taking, and heightened sensitivity to global developments, including geopolitical tensions and shifting interest rate expectations.”

Looking ahead, Asuncion expects portfolio flows to remain volatile and tied to global risk appetite, U.S. monetary policy, and geopolitical conditions. “The ongoing Middle East conflict, in particular, could continue to drive periods of risk aversion and encourage flows toward safe-haven assets,” he said. Still, he noted that “the Philippines remains supported by relatively sound macroeconomic fundamentals, steady economic growth, and an attractive domestic investment environment,” which should provide some support for foreign interest even as inflows and outflows alternate.