FOREIGN direct investments (FDI), the kind invested for the long haul that helps generate taxes and create employment, moderated to $1.37 billion in the first 11 months of 2010 from 2009 FDI of $1.78 billion, in part a result of global events such as the debt crisis in some parts of Europe, tension in Korea, the threat of inflation in China, and tentative economic numbers out of the United States.

According to the Bangko Sentral ng Pilipinas (BSP), net equity capital, or the difference between equity placements from withdrawals, severely receded to net $477 million from year ago of net $1.8 billion, from gross of $2 billion. During the period, foreign fund managers invested $749 million in various ventures and withdrew $272 million for the net $477 million.

The BSP said that for the month of November 2010, equity capital net inflows rapidly accelerated to $274 million from $8 million in 2009 on sizable inputs by two Japanese companies. One of these was Sumitomo
Metal Mining Corp. Reinvested earnings, or money that could have been repatriated but was instead allowed to remain in the Philippines, increased more than four times during the period to $263 million from $62 million.

Net other capital improved tremendously and $634 million flowed inward from year ago of $88 million, as parent firms overseas extended loans to affiliates and subsidiaries in the Philippines.

According to the BSP, the bulk of foreign investments came from the United States, Japan, Singapore, Hong Kong, Ireland and the Netherlands. These invested not only in the mining and quarrying business but also in real estate, banking, manufacturing, finance, insurance, power generation and electricity, gas, steam and air conditioning.