Other financial firms’ net foreign assets rising – BSP

By Lee C. Chipongian

The net foreign assets (NFA) of other financial corporations (OFCs) which are private and quasi entities engaged in market or non-financial services, reached ₱83.7 billion in the second quarter, up 2.2 percent from the previous quarter’s ₱81.9 billion, based on a Bangko Sentral ng Pilipinas (BSP) survey.

The Other Financial Corporations Survey (OFCS) details the claims and liabilities of OFCs which the BSP began reporting in October but actually started the data compilation in 2014 to solve the gap in the financial sector data.

The BSP said the survey is an “important tool in identifying the concentration of vulnerabilities of the financial sector vis-à-vis the other sectors of the economy.”

OFCs include trust companies, private and public insurance corporations, holding companies, and government financial institutions specifically government owned or controlled corporations engaged in financial intermediation. It also includes non-money market funds covering unit investment trust funds and investment companies, as well as other financial intermediaries and auxiliaries consisting of offshore banking units and non-banks without quasi-banking functions.
The BSP said that in the second quarter, OFCs’ NFA balance improved because of the “larger contraction of OFCs’ liabilities to non-residents compared to the contraction of claims on non-residents.”

From April to June this year, OFCs’ domestic claims totaled ₱6.117 trillion, up 2.8 percent from January to March’s ₱5.953 trillion with higher claims on other sectors and depository corporations, and the net claims on the Central Government.

The BSP noted that the claims on other sectors rose 1.9 percent to ₱3.075 trillion during the quarter from ₱3.017 trillion previously due to higher holding of shares and other equity issued by other non-financial corporations and outstanding loans extended to the household sector.

OFCs’ net claims on depository corporations also went up by 3.2 percent to ₱1.613 trillion from ₱1.563 trillion because holdings of securities other than shares were higher as well as currency and deposits. The net claims on the Central Government increased 4.29 percent to ₱1.429 trillion from ₱1.372 trillion.

The OFCs’ other liabilities went up by 2.8 percent to ₱6.201 trillion from ₱6.034 trillion.

The BSP already have 10 quarters of OFCS data, from the first quarter 2017 until the second quarter 2019.

The BSP said they will regularly release the OFCS within four months after the reference quarter.