Domestic claims of OFCs expand by 4.8% to ₱6.6 trillion in H1 2020

Based on preliminary data from the Other Financial Corporations Survey (OFCS), the domestic claims of the OFCs grew by 4.8 percent in H1 2020 to ₱6,583.8 billion in Q2 2020 from ₱6,284.2 billion in Q4 2019 (Figure 1).

This increase is due mainly to the rise in the claims on central government (CG), the private sector, and the depository corporations (DCs).

Claims on CG rose by 10.6 percent to ₱1,648.7 billion in Q2 2020 from ₱1,490.4 billion in Q4 2019. The growth may be attributed to the increase in the sector’s holdings of debt securities issued by the CG.

Meanwhile, claims on private sector increased by 2.5 percent in the first six months of the year to ₱3,266.5 billion from ₱3,186.2 billion as of end-2019 mainly due to trust entities’ substantial holdings of debt securities issued by the private corporations.

Moreover, claims on DCs grew by 3.2 percent to ₱1,665.5 billion from ₱1,613.9 billion in Q4 2019 on account of the OFCs’ higher holdings of debt securities issued by banks and the build-up in the sector’s other deposits.

The net foreign assets (NFA) of OFCs declined by 15.2 percent from ₱125.6 billion in Q4 2019 to ₱106.5 billion in Q2 2020. This contraction stemmed from the decrease in OFCs’ claims on nonresidents, which were mostly in the form of foreign currency denominated savings deposits and investments in debt securities.

Further, the rise in liabilities to non-residents, which were in the form of foreign currency deposits, contributed to the decline in the NFA.

The other liabilities of the OFCs grew by 4.4 percent during the review period to ₱6,690.3 billion in Q2 2020 from the ₱6,409.8 billion in Q4 2019. Shares and other equity, and insurance technical reserves continue to be the main sources of funds of the OFCs.