FOREIGN direct investment (FDI) inflows reached $1.1 billion in the first 10 months of 2012, surpassing the $853 million recorded in the same period in 2011, Bangko Sentral ng Pilipinas (BSP) said on Friday.

BSP data showed that the surge of FDI emanated largely from net infusion of equity capital amounting to $1.2 billion.

The cumulative increase in FDI during the 10-month period reflected investors’ positive reaction to the country’s robust economic performance and the improved outlook, following successive favorable credit rating actions by the Fitch Ratings, Standard and Poors and Moody’s Investor Service in June, July and October 2012, respectively.

In particular, gross equity capital placements during the period totaled $1.5 billion, almost thrice the year-ago level of $575 million.

Inflows were channeled mainly from the United States, Australia, The Netherlands, Japan and the British Virgin Islands, and were primarily directed to the manufacturing, real estate, wholesale and retail, financial and insurance, mining, transportation and storage sectors.

All FDI components posted positive balances during the month, reflecting foreign investors’ growing optimism over the country’s macroeconomic fundamentals.

Meanwhile, the BSP added that the other capital account—consisting largely of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines—posted net outflows of $252 million, a reversal of the $398-million net inflows in 2011.

The BSP said that, for October alone, FDI yielded net inflows of $38 million, significantly lower than $71-million net inflows registered in the same month last year.

Net inflows for the month consisted mainly of equity capital, which reached $62 million, compared to $22 million, almost thrice the year-ago level. These inflows, mostly from the US, Japan and Switzerland, were channeled to the manufacturing, real estate and financial and insurance sectors.

Also, reinvested earnings amounted to $15 million. However, these were partly offset by net outflows recorded in the capital account aggregating $24 million, a reversal of the $43 million net inflows posted in October 2011, the BSP added.

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