Based on the preliminary results of the Other Financial Corporations Survey (OFCS), the domestic claims of the other financial corporations (OFCs) increased by 1.2 percent quarter-on-quarter to ₱6,284.2 billion in Q4 2019, albeit slower than the 1.5 percent growth in Q3 2019.1 The growth in the OFCs’ domestic claims was partly attributed to the expansion in claims on other sectors, despite the decline in net claims on Central Government (CG) and claims on depository corporations (DCs) in Q4 2019.2
In particular, claims on other sectors grew by 2.8 percent during the quarter to ₱3,203.9 billion from ₱3,117 billion in Q3 2019 mainly due to higher investments in equity securities and outstanding loans extended to the private sector. Meanwhile, net claims on CG amounted to ₱1,466.4 billion in Q4 2019, 0.4 percent lower than ₱1,471.7 billion in Q3 2019. The reduction was due to the 0.3 percent decrease in the sector’s holdings of debt securities issued by the CG and the 1.3 percent increase in the OFCs’ liabilities to the CG. Similarly, claims on DCs declined by 0.4 percent to ₱1,613.9 billion from ₱1,619.9 billion in Q3 2019 on account of the OFCs’ lower holdings of equity securities issued by banks and the decrease in the sector’s other deposits.3
The net foreign assets (NFA) of OFCs grew by 25.4 percent quarter-on-quarter to ₱125.6 billion in Q4 2019 from ₱100.1 billion in Q3 2019. This increase in NFA stemmed from the expansion in the claims on nonresidents, mostly in the form of debt securities and foreign currency deposits, and the decline in the OFCs’ liabilities to nonresidents in the form of debt securities.
The other liabilities of the OFCs grew by 1.6 percent to ₱6,409.8 billion in Q4 2019 from the ₱6,308.7 billion in Q3 2019. Shares and other equity, and insurance technical reserves continue to be the main sources of funds of the sector.4
1 The OFCS presents the comprehensive measure of the claims and liabilities of the OFCs. OFCs refer to institutional units providing financial services other than banks, nonbanks with quasi-banking functions, nonstock savings and loan associations, and the central bank. These institutional units are: 1) trust entities, 2) private and public insurance corporations, 3) holding companies, 4) government financial institutions (specifically government-owned or -controlled corporations engaged in financial intermediation), 5) non-money market funds covering unit investment trust funds and investment companies, and 6) other financial intermediaries and auxiliaries (consisting of offshore banking units and non-banks without quasi-banking functions).
2 Other sectors include: 1) state and local government, 2) public nonfinancial corporations, and 3) private sector, which is composed of other nonfinancial corporations, and households and non-profit institutions serving households. The other nonfinancial corporations refer to private corporations and quasi-corporations whose principal activity is the production of market goods or nonfinancial services.
3 Other deposits includes mainly savings and time deposits, and placements in money market funds.
4 Shares and other equity consist of funds contributed by owners, retained earnings, current year result, and valuation adjustment. Insurance technical reserves consist of prepayments of insurance premiums and outstanding claims. These are reserves that insurance enterprises hold to cover the amounts they expect to pay out for claims.
Source: Bangko Sentral ng Pilipinas (BSP)