OFCs domestic claims rise 9% – BSP

Published August 2, 2021, 7:00 AM

by Lee C. Chipongian

The country’s domestic claims of Other Financial Corporations (OFCs) went up by nine percent year-on-year to P6.815 trillion as of end-first quarter 2021 from P6.251 trillion due to higher claims from the private sector and depository corporations (DCs).

OFCs are trust entities, private and public insurance corporations, holding companies, and government financial institutions. It also includes non-money market funds covering unit investment trust funds and investment companies, and other financial intermediaries such as offshore banking units and non-banks without quasi-banking functions.

The Bangko Sentral ng Pilipinas (BSP) said claims from the private sector increased  to P3.493 trillion during the period, up 12.8 percent from P3.097 trillion last year, resulting in higher OFC investments in equity and debt securities issued by private nonfinancial corporations.

In tallying OFCs based on the BSP’s Other Financial Corporations Survey (OFCS), the BSP looks into other nonfinancial corporations, 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, said the BSP

Claims on DCs also increased 9.5 percent in the first quarter to P1.748 trillion from P1.596 trillion. The BSP said the higher claims on DCs came from its holdings of bank-issued debt securities and increased deposits.

As for claims on the central government, this also increased by 0.8 percent to P1.556 trillion from P1.543 trillion, and it is attributed to the decline in OFCs’ liabilities to the central government and increase in debt securities holdings.

The OFCs’ net foreign assets went up by 42.6 percent to P156.2 billion in the first quarter from P109.5 billion same time in 2020. “The growth was brought about by the increase in OFCs’ claims on nonresidents, which were mostly in the form of investments in debt and equity securities, and insurance technical reserves (for outstanding claims, expected losses, bonuses and rebates),” said the BSP.

The OFCs’ assets was funded primarily by issuances of shares and other equity, which increased its other liabilities by 9.6 percent to P6.971 trillion end-March from P6.361 trillion same time in 2020.