29 January 2021Domestic Claims of Other Financial Corporations (OFCs)
Rise by 4.7% Year-on-Year in Q3 2020
Press Release: Based on preliminary data from the Other Financial Corporations Survey (OFCS), the domestic claims of the OFCs grew by 4.7 percent in Q3 2020 to ₱6,500.7 billion from ₱6,208.6 billion in Q3 2019 (Figure 1).[1] This increase is mainly attributed to the rise in the claims on central government (CG), the private sector, and depository corporations (DCs).
Claims on CG expanded by 10 percent from the previous year’s level of ₱1,495.4 billion to ₱1,644.7 billion in Q3 2020. The upturn may be attributed to the increase in the sector’s holdings of debt securities issued by the CG. Likewise, claims on the private sector grew by 3.3 percent in Q3 2020 to ₱3,206.4 billion from ₱3,103.8 billion in Q3 2019 mainly due to the build-up of loans extended to households and higher investments in debt securities issued by private nonfinancial corporations. Moreover, claims on DCs increased by 1.1 percent from ₱1,619.9 billion in Q3 2019 to ₱1,637.3 billion on account of OFCs’ higher holdings of debt securities issued by banks.
Meanwhile, the net foreign assets (NFA) of OFCs rose by 40.8 percent from ₱100.1 billion in Q3 2019 to ₱140.9 billion in Q3 2020. This growth was brought about by the upsurge in OFCs’ claims on nonresidents, which were mostly in the form of investments in debt securities and other deposits to nonresidents.[3] Furthermore, the decline in nonresidents’ holdings of debt securities issued by OFCs and loans payable by OFCs to nonresidents contributed to the expansion of the NFA.
The other liabilities of the OFCs was higher by 5.3 percent year-on-year from the ₱6,308.7 billion in Q3 2019 to ₱6,641.7 billion in Q3 2020. Shares and other equity, and insurance technical reserves continue to be the main sources of funds of the OFCs.[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, non-banks 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] The private sector 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 are mainly comprised of 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.
