MANILA, Philippines - Foreign direct investments (FDI) to the Philippines reached $1.328 billion for the first 10 months of 2009, a 17.9% increase from the same period in 2008.

The Bangko Sentral ng Pilipinas (BSP) said the growth was driven mainly by sustained equity capital inflows and higher reinvested earnings.

Gross equity capital placements for the 10-month period reached $1.5 billion, higher by 22.4% from the year-ago level.

According to the BSP, the equity capital infusions came from Hong Kong, Japan, and the United States, and were directed mainly to mining, construction, and financial intermediation sectors.

Reinvested earnings, on the other hand, reached $125 million as of end-October, a reversal of the $131-million net outflow recorded in the same period in 2008.

"Investors were encouraged to retain part of their earnings in local enterprises/corporations given the Philippine economy's resilience amidst challenging global economic conditions," the BSP said.

Meanwhile, other capital account reversed to a net outflow of $157 million as of end-October from a net inflow of $197 million in the same period in 2008. The BSP said most of the outflows were traced to higher trade credits extended by Philippine-based subsidiaries or affiliates to parent companies abroad.

For the month of October alone, FDIs yielded a net inflow of $59 million in contrast to the $62-million net outflow in October 2008.

"All FDI components posted net inflows during the month, reflecting favorable investor sentiment on the country's underlying macroeconomic fundamentals," BSP Governor Amando Tetangco said.

The BSP is expecting FDIs to reach $1.5 billion in 2009 and $1.8 billion this year.