NET INFLOWS of foreign direct investments (FDI) rose to US$311 million in September 2008, almost ten times higher than the year-ago level.  BSP Governor Amando M. Tetangco, Jr. said that the robust direct investment growth was achieved following notable improvements in other capital and reinvested earnings.

The other capital account reversed to a net inflow of US$230 million from a net outflow of US$63 million in the same period last year, largely on account of higher trade credits extended to affiliates abroad amounting to US$187 million.

The reinvested earnings account also rose to US$18 million, from US$14 million in the same month last year.  Meanwhile, equity capital investments continued to post a net inflow of US$63 million, although at lower level compared to US$81 million last year.

Strong foreign exchange inflows in September pushed the nine-month FDI level to US$1.4 billion, lower than the US$2.5 billion recorded a year-ago.  The lower net FDI inflows during the period January-September 2008 ensued as lingering global financial uncertainties led foreign investors to stay on the sidelines and wait for more stable financial market conditions.  Even as investors remained cautious, the country continued to attract equity capital investments, which amounted to a net inflow of US$823 million.

Equity capital was infused by investors coming from the U.S., Japan, Singapore, South Korea, Germany, Malaysia, Taiwan, Hong Kong, and the Netherlands. These equity capital investments went mainly to manufacturing (shipbuilding/ repair, auto electronics parts/ components, paper/cigarette/ tobacco products), services (recreational/ cultural) , mining, construction (hotel/resort/ water spa development, power plant facility, global gateway and logistics hub), utilities, real estate, and financial institutions.

Reinvested earnings also grew during the nine-month period to US$360 million, higher by more than 50 percent relative to the same period in 2007. The other capital account, consisting mainly of intercompany borrowing/lending between foreign direct investors and their subsidiaries/ affiliates in the Philippines, recorded lower net inflows amounting to US$204 million on account of intercompany loan repayments. - bsp.gov.ph