Foreign direct investments (FDIs) fell 45 percent in the first nine months of the year as overseas investors shelved plans to expand their Philippine operations amid the global economic crisis.

FDIs during the months of January to September amounted to only $1.39 billion, against $2.54 billion in the same period last year.

However, for September alone, net FDI inflows rose significantly to $311 million from $32 million last year, mainly due to improvements in reinvested earnings and the other capital account, which consists of borrowing and lending transactions between foreign investors and their local subsidiaries, according to the Bangko Sentral ng Pilipinas (BSP).

The other capital account during the month reversed to a net inflow of $230 million from a net outflow of $63 million in 2007. Reinvested earnings, on the other hand, went up to $18 million from $14 million.

Also for the month of September, the Philippines was able to attract less equity capital investments, which amounted to a net inflow of $63 million, down from $81 million last year, the BSP said. These capital investments were infused by investors coming from the US, Japan, Singapore, South Korea, Germany, Malaysia, Taiwan, Hong Kong and the Netherlands.

According to the central bank, these inflows were channeled to the manufacturing subsectors, including shipbuilding and repair, auto electronics parts and components, paper and tobacco products.

In services, the recreational and cultural businesses as well as mining subsectors also attracted investors.

Investments were also seen in construction, mainly for hotel/resort/water spa development, power plant facility, global gateway and logistics hub.

Finally, the BSP said foreign investments flowed into utilities, real estate, and financial institutions.

The drastic slowdown in net FDI inflows was expected since the BSP has already projected that total inflows this year would drop from $4.2 billion in 2007 to $2.6 billion and possibly even less.