MANILA, Philippines — More financial market investors left the country than entered last month after President Rodrigo Duterte declared martial law in Mindanao to fight extremists groups, the Bangko Sentral ng Pilipinas reported on Friday.
Foreign portfolio investments posted a net outflow of $24.35 million in May, reversing April's $51.39 million and the $72.81 million net inflows in the same period last year.
A net outflow indicates more investments left the country than entered, while the opposite shows otherwise.
Portfolio investments—also called hot money—are channeled mainly to financial markets are therefore, sensitive to local and external developments.
"This (net outflow) may be attributed to investor reaction to weak first-quarter earnings of some corporations and lower-than-expected GDP (gross domestic product) data of the country on the first quarter of 2017," BSP said in the statement.
A close look at the data, however, showed that the Philippines recorded its biggest net inflow for the month during the May 15-19 week at $181.06 million.
First quarter GDP growth of 6.4 percent, which was slower than expected, was announced on May 17.
The net inflow was partially offset by a $141.16-million net outflow on the May 22-26 week, data showed. Duterte declared martial law in Mindanao last May 24.
There was no mention of the declaration or the fight against terrorists affecting investor perception on the BSP statement. Officials are yet to respond to queries as of this post.
From January to May, the country already recorded a net outflow of $540.39 in hot money, a reversal of last year's $129.07 million net inflow.
"While outflows were relatively steady, there was a substantial drop in inflows which may be attributed to continued uncertainties arising from domestic and international developments," BSP said.
It cited the recent US air strike in Syria, global terrorist attacks, interest rate increase of US Federal Reserve in March and locally, the closure of mining companies.
By country, the US, Singapore, Malaysia and Luxembourg accounted for the bulk or 76.9 percent of inflows. On flipside, the US was the main beneficiary of outflows.