The domestic claims of non-bank or other financial corporations (OFCs) grew by 15 percent year-on-year in 2023 to P9.054 trillion from P7.873 trillion, according to the Bangko Sentral ng Pilipinas’ (BSP) Other Financial Corporations Survey (OFCS).
The quarterly OFCS is basically an analytical survey that provides a comprehensive measure of the claims or assets, and liabilities of the country’s OFCs.
OFCs are private corporations and quasi-corporations whose principal activity is the production of market goods or non-financial services. These institutional units provide “financial services other than banks, non-banks with quasi-banking functions, non-stock savings and loan associations, and the central bank.” These are comprised of non-money market funds of trust institutions, trust corporations, and investment companies, private and public insurance corporations, holding companies, government-owned or -controlled corporations engaged in financial intermediation, and other financial intermediaries and auxiliaries, said the BSP.
On a quarterly basis, the domestic claims of OFCs went up by 2.7 percent in the fourth quarter 2023 from P8.817 trillion in the third quarter, based on preliminary survey results.
In a statement, the BSP said the year-on-year growth was due to the rise in the sector’s claims on the central government, the private sector, and the depository corporations. The other sectors are the state and local government, public non-financial corporations (NFCs), and private sector. Depository corporations include the BSP and other depository entities.
OFCs’ claims on the central government increased on account of the higher holdings of government-issued debt securities. “Moreover, the other financial corporations’ claims on the private sector rose as its investments in equity shares issued by the other nonfinancial corporations and loans extended to the household sector grew (while the) sector’s claims on the depository corporations also rose amid the increase in its bank deposits and holdings of bank-issued securities,” said the BSP.
The net foreign assets of the sector increased by 48 percent year-on-year to P388.7 billion from P262.7 billion in 2022.
Meanwhile, the 16.1 percent growth in the sector’s other liabilities to P9.443 trillion from P8.135 trillion is “due mainly to the rise in its shares and other equity issuances and insurance technical reserves,” said the BSP.
By component, the central bank noted that the claims on the other sectors, specifically the other NFCs, comprised the majority of OFCs domestic claims as of end-2023, followed by claims on depository corporations and the central government.
The BSP said the quarter-on-quarter growth was also due to the increase in the domestic claims on the other sectors, the central government, and the depository corporations.
The OFCs’ claims on the other sectors, particularly the private sector, increased last year due to higher investments in equity shares issued by other NFCs and higher loans extended to households.
Its claims on the central government also increased as its holdings of government-issued debt securities rose while claims on depository corporations grew because of higher holdings of bank-issued debt securities and deposits with the banks.
The BSP reported that OFCs’ net foreign assets went up by 4.8 percent quarter-on-quarter to P388.7 billion from P370.9 billion with the expansion of the sector’s investment in non-resident-issued debt securities.
The sector’s other liabilities also rose by 2.8 percent from P9.188 trillion in the third quarter mainly on account of the increase in its shares and other equity issuances and insurance technical reserves, said the BSP.