Gov’t bonds lured foreign funds in 2025 as PH stocks lagged
The Philippines still recorded a net inflow of flighty foreign capital in 2025 despite a turbulent year, as strong demand for peso-denominated government bonds more than offset heavy foreign selling in the local stock market.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that inflows from foreign portfolio investment (FPI) transactions registered with the central bank had beaten outflows by nearly $4 billion in the first 11 months of last year. That marked a 54-percent increase from the same period in 2024.
In November alone, net inflow amounted to $342 million, about three and a half times the level a year earlier.
Such investments, often referred to as “hot money,” are prone to swift reversals at the first sign of unfavorable conditions.
These funds are far more sensitive to shifts in domestic and global sentiment than foreign direct investments, which tend to be longer-term and more closely tied to job creation.
Even so, the pace of inflows suggests that the net gain for 2025 could surpass the $2.1 billion recorded at the end of 2024.
Figures showed the 11-month hot money inflows last year amounted to $26.4 billion, exceeding the $22.4 billion that headed for the exit during the period.
Treasury bonds, bills
By type of instrument, government securities like Treasury bonds and Treasury bills posted a net inflow of $5.8 billion, as the state took advantage of lower interest rates amid the easing cycle of the central bank.
That helped offset the $1.8 billion net outflow seen in the local equities market, which was battered by a dangerous mix of global trade uncertainties, sluggish economic growth and domestic governance concerns that gutted business confidence.
Looking ahead, the central bank expects total FPIs—including transactions not registered with the BSP—to have posted a net inflow of $8.1 billion in 2025, up from 2024’s $5.7 billion. To note, registration of inbound portfolio flows is optional and applies only to investors who purchase foreign exchange from local banks when moving their funds.
But for this year, the BSP said total hot money net inflow may ease to $5.6 billion due to “cautious market sentiment and heightened global financial volatility.”
