MANILA, Philippines - Foreign direct investments (FDIs) posted a net inflow of $101 million in January, lower compared to the $393 million registered in the same month last year, the central bank said on Wednesday.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said intercompany loan availments and reivested earnings contributed to the FDI inflows, indicating continued favorable outlook for the global economy this year.

FDIs are what the country should attract as they boost economic activity and create more jobs. Unlike portfolio investments (in stocks and bonds), which can fly out of the country at any moment, FDIs are most likely for the long term, and they go to heavy industries in the form of factories, buildings, equipment and other physical assets.

The BSP said reinvested earnings reversed to a net inflow of $27 million from the year-ago net outflow of $35 million, reflecting the better-than-expected performance of local corporations in 2009.   

The other capital account—consisting largely of intercompany borrowings of local units from parent firms abroad—recorded a higher positive balance of $101 million during the first month of 2010.

Meantime, equity capital recorded a net outflow of $27 million from the $417 million net inflow posted in January 2009.  The modest gross inflows during the month amounting to $17 million came largely from the US and were directed to the manufacturing, real estate, and financial intermediation sectors, the central bank said.

It added that the significantly large inflows recorded in January 2009 resulted from the privatization of a local power corporation.