Domestic claims of OFCs up by 8.1 percent in Q4 2022

Based on preliminary results of the Other Financial Corporations Survey (OFCS), the domestic claims of the OFCs grew by 8.1 percent in Q4 2022 to ₱7,864.7 billion from ₱7,276.3 billion in Q4 2021 (Figure 1).^[1]

The rise in the OFCs’ domestic claims in Q4 2022 was due to their higher claims on depository corporations (DCs), on central government and on other sectors.^[2]

In particular, the OFCs’ claims on DCs expanded owing mainly to the growth in the sector’s deposits in banks and holdings of bank-issued equity securities.

Likewise, the OFCs’ claims on central government grew on account of increased holdings of government securities. Similarly, the OFCs’ claims on other sectors, particularly, the private sector, rose slightly as loans extended to households and nonfinancial corporations increased.^[3]

By component, claims on other sectors, specifically the private sector, comprised the bulk of the OFCs’ domestic claims during the quarter, followed by claims on DCs and the central government (Figure 2).

The net foreign assets of OFCs declined by 2.3 percent to ₱261.1 billion in Q4 2022 from ₱267.3 billion in Q4 2021 as the sector’s liabilities grew faster than its claims on nonresidents. The increase in the OFCs’ foreign liabilities was due mainly to higher loans payable to nonresidents. Meanwhile, the growth in foreign claims was primarily on account of increased investments in debt securities issued by nonresidents.

The expansion in the OFCs’ gross assets was funded mainly by its issuances of shares and other equity to other sectors.

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^[1]   The OFCS is a 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 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.

^[2]  The other is comprised of (a) state and local government, (b) public nonfinancial corporations, and (c) private sector.^.

^[3] The private sector is composed of 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.