Q2 2024 Domestic Claims of Other Financial Corporations Decline Marginally Q-o-Q, But Rise By 7.8 Percent Y-o-Y

Based on the preliminary results of the Other Financial Corporations Survey, the domestic claims of the other financial corporations fell marginally by 0.03 percent quarter-on-quarter (q-o-q) in Q2 2024.^[1]

In particular, the sector’s domestic claims stood at ₱9,306.6 billion in Q2 2024 from ₱9,309.1 billion in Q1 2024 and ₱8,633.5 billion in Q2 2023 (Figure 1).

The q-o-q decline in the other financial corporations’ domestic claims stemmed from the decrease in its claims on the other sectors and the central government.^[2] The other financial corporations’ claims on the other sectors dropped as its holdings of equity shares issued by other nonfinancial corporations fell, although there was growth in the loans extended to households. Likewise, the sector’s claims on the central government dipped as its holdings of government-issued debt securities declined. The decrease in the other financial corporations’ domestic claims was tempered by the expansion in the sector’s claims on the depository corporations on account of the sector’s increased deposits with the banks.^[3]

The net foreign assets of the other financial corporations rose by 16.9 percent q-o-q to ₱478.2 billion from ₱409.0 billion as the sector’s investments in nonresident-issued debt securities and equity shares increased. Meanwhile, the sector’s other liabilities increased mainly on account of the rise in its net other liabilities.^[4]

On a year-on-year (y-o-y) basis, the other financial corporations’ domestic claims grew at a slower pace of 7.8 percent in Q2 2024 from the 12.9 percent y-o-y increase recorded in Q1 2024.

The said expansion is due mainly to the rise in the sector’s claims on the other sectors, the central government, and the depository corporations. In particular, the other financial corporations’ claims on the other sectors grew as its holdings of equity shares issued by other nonfinancial corporations and the loans extended to the household sector increased.

Likewise, the sector’s claims on the central government grew, owing to the rise in its investments in government-issued debt securities. Moreover, the sector’s claims on the depository corporations expanded as its deposits with the banks increased.

The net foreign assets of the sector climbed by 37.2 percent y-o-y in Q2 2024, faster than the 33.3 percent y-o-y growth posted in Q1 2024. Meanwhile, the increase in the sector’s shares and other equity issuances and insurance technical reserves steered the rise in its other liabilities.^[5]

By component, claims on the other sectors, specifically the other nonfinancial corporations, comprised the bulk of the other financial corporations’ domestic claims in Q2 2024 (Figure 2). This is followed by the claims on the depository corporations and the central government.

---

[1] The Other Financial Corporations Survey is a comprehensive measure of the claims and liabilities of the other financial corporations. Other financial corporations refer to institutional units providing financial services other than banks,
non-banks with quasi-banking functions, non-stock savings and loan associations, and the central bank. These institutional units are comprised of non-money market investment funds, other financial intermediaries except insurance corporations and pension funds, financial auxiliaries, captive financial institutions and money lenders, insurance corporations, and pension funds.

[2] The other sectors are comprised of (a) state and local government, (b) public nonfinancial corporations, and (c) private sector. The private sector is composed of other nonfinancial corporations and other resident sectors. The other nonfinancial corporations refer to private corporations and quasi-corporations whose principal activity is the production of market goods or nonfinancial services.

[3] The depository corporations are composed of (a) the central bank, and (b) other depository corporations (i.e., deposit-taking corporations, except the central bank).

[4] Net other liabilities or other items (net) is computed as the difference of the total other liabilities and the total other assets, which are not included elsewhere in the survey. The said item also includes a consolidation adjustment which reflects the discrepancy after netting out inter-OFCs claims and liabilities.

[5] The insurance technical reserves are amounts set aside by insurance companies to meet future insurance liabilities, such as but not limited to unearned premiums, outstanding claims, expected losses, bonuses and rebates (for life insurance).