Other financial corporations’ domestic claims rose in Q3 2019

Preliminary data from the Other Financial Corporations Survey (OFCS) showed that the domestic claims of the other financial corporations (OFCs) increased by 1.5 percent quarter-on-quarter to P6,208.6 billion in Q3 2019 from P6,117.8 billion in Q2 2019.

This development was attributed to the increase in the net claims on Central Government (CG), other sectors, and depository corporations (DCs).

In particular, the rise in the domestic claims of the OFCs was largely on account of the OFCs’ additional investments in equity and debt securities issued by local banks and the expansion of loans extended to the private sector.

Net claims on CG reached P1,471.7 billion in Q3 2019, 2.9 percent higher than P1,429.6 billion in Q2 2019. This growth was due to the 2.6 percent increase in the sector’s holdings of debt securities issued by the CG and the 16 percent decline in the OFCs’ liabilities to the CG during the quarter.

Claims on other sectors grew by 1.4 percent during the quarter to P3,117 billion from P3,075 billion in Q2 2019 as outstanding loans extended to the private sector expanded. Meanwhile, claims on DCs in Q3 2019 rose by 0.4 percent to P1,619.9 billion from P1,613.2 billion in Q2 2019 due to OFCs’ higher holdings of equity and debt securities issued by local banks.

Net foreign assets (NFA) of OFCs accelerated by 19.6 percent to reach P100.1 billion in Q3 2019 from the P83.7 billion in Q2 2019. The upturn in the sector’s NFA balance was due to the continued reduction in the debt security issuances of OFCs to nonresidents (by 9.1 percent) and the rise of the sector’s deposits to nonresidents (by 0.4 percent).

Likewise, the other liabilities of the OFCs grew by 1.7 percent from the P6,201.5 billion in Q2 2019 to P6,308.7 billion in Q3 2019. Shares and other equity, and insurance technical reserves continue to be the main sources of funds of the sector. (BSP)