By LEE C. CHIPONGIAN
The Bangko Sentral ng Pilipinas (BSP) said domestic claims of other financial corporations (OFCs) have reached ₱6.208 trillion in the third quarter of 2019, up 1.5 percent quarter-on-quarter or from ₱6.117 trillion (end-June).
Based on the Other Financial Corporations Survey (OFCS), the increase was attributed to the net claims on the central government, other sectors (state and local government, public nonfinancial corporations, and private sector) and depository corporations.
“The rise in the domestic claims of the OFCs was largely on account of the OFCs’ additional investments in equity and debt securities issued by local banks and the expansion of loans extended to the private sector,” the BSP said.
OFCS as described by the BSP is a comprehensive measure of the claims and liabilities. OFCs are institutional units providing financial services other than banks, nonbanks with quasi-banking functions, non-stock savings and loan associations, and the central bank.
These institutional units are: Trust entities; private and public insurance corporations; holding companies; government financial institutions; non-money market funds covering unit investment trust funds and investment companies; and other financial intermediaries and auxiliaries.
In a statement, the central bank said the central government’s net claims totaled P1.471 trillion during the period, about 2.9 percent higher than ₱1.429 trillion in the previous quarter.
The BSP said the increase was because of a 2.6 percent growth in the sector’s holdings of debt securities issued by the central government and the 16 percent decline in the OFCs’ liabilities to the central government during the quarter.
In the meantime, claims on other sectors went up by 1.4 percent to ₱3.117 trillion from ₱3.075 trillion in the second quarter 2019 as the outstanding loans extended to the private sector expanded.
Claims on depositary corporations in the same period also increased by 0.4 percent to ₱1.619 trillion from ₱1.613 trillion because of OFCs’ higher holdings of equity and debt securities issued by local banks.
The BSP also reported that the net foreign assets (NFA) of OFCs rose by 19.6 percent to ₱100 billion from ₱83.7 billion. “The upturn in the sector’s NFA balance was due to the continued reduction in the debt security issuances of OFCs to nonresidents (by 9.1 percent) and the rise of the sector’s deposits to nonresidents (by 0.4 percent),” the BSP said.
The BSP added that the other liabilities of the OFCs grew by 1.7 percent from the ₱6.201 trillion in the second quarter 2019 to ₱6.308 trillion in the third quarter 2019 as “shares and other equity, and insurance technical reserves continue to be the main sources of funds of the sector.”
The shares and other equity consist of funds contributed by owners, retained earnings, current year result, and valuation adjustment.