Short-term investment vulnerable in the Philippines – Moody’s

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Moody’s Investors Service said that emerging markets, including the Philippines, remain inherently vulnerable to the risk of capital outflows associated with tightening global liquidity. In its recent Global Macro Outlook, Moody’s said short-term investments from foreign investors will likely remain in the red for the Philippines and other emerging market economies for the year, but long term foreign direct investments will remain. In the report, Moody’s said 19 emerging countries, including the Philippines, have experienced US$2 billion in net outflows in the second quarter. In the Philippines, latest data from the central bank showed foreign portfolio investments (FPI) remain in positive territory but declined in July to a net inflow of US$53.29 million against the US$296.47 million in the same month last year. Moody’s said escalating trade frictions further add to overall uncertainty brought about by the tightening global liquidity conditions associated with the reversal of monetary policies in major advanced economies after a decade of exceptional easing.

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