MANILA – The Philippines is a “solid” investment destination, Bangko Sentral ng Pilipinas Governor Nestor Espenilla said Thursday, responding to a report that foreign funds were exiting the country.
The average fund weight of emerging market investors on the Philippines fell to 0.87 percent, the lowest since 2011, the Financial Times reported, citing Copley Fund Research, which analyzed 180 emerging market funds.
Eighty-three percent of funds cut their holdings in the Philippines over the past year and only 58 percent now have any funds at all in the Philippines, the FT said. The study included vehicles run by BlackRock, Fidelity, Ashmore, Carmignac and Pictet.
The report cited concerns over the pace of the BSP’s interest rate hikes and potential uncertainties under President Rodrigo Duterte.
“The BSP conducts monetary policy based on what we think is best for our economy,” Espenilla said in a statement.
“It’s too bad if a number of these funds currently find our investment profile to be incompatible with their profit goals,” he said.
Espenilla said he hoped foreign funds would “reconsider once they realize the Philippines remains a solid investment opportunity with a strong growth story and considerable upside.”
The concerns cited in the FT article are “misplaced,” BSP Deputy governor Diwa Guinigundo said.
“On the central bank being behind the curve, we don’t really know where the analytics of this assessment is coming from,” he said.
Guinigundo said elevated inflation this year was mainly due to higher oil prices in the world market.
“When the supply pressures proved protracted, the BSP did not hesitate and increased the policy rate three times in May, June and August for a total of 100 basis points,” he said. (ABS-CBN News)
