Q3 2023 domestic claims of other financial corps up by 2.4% quarter-on-quarter and 17.8% year-on-year

Based on preliminary results of the Other Financial Corporations Survey, the domestic claims of the other financial corporations grew by 2.4 percent in Q3 2023, slightly slower than the 4.7 percent quarter-on-quarter growth in Q2 2023.^[1]

In particular, the domestic claims of other financial corporations reached ₱8,817.2 billion in Q3 2023 from ₱8,609.9 billion in Q2 2023 (Figure 1).

The quarter-on-quarter growth in the other financial corporations’ domestic claims in Q3 2023 was driven by the rise of its claims on the depository corporations, the central government, and the other sectors.^[2]

The sector’s claims on the depository corporations rose amid the increase in its deposits with banks and holdings of bank-issued debt securities.

Similarly, the other financial corporations’ larger holdings of government-issued debt securities contributed to the rise in the sector’s claims on the central government.

Moreover, the other financial corporations’ claims on the other sectors, particularly the private sector, grew as the sector extended more loans to households and increased its holdings of equity shares in other nonfinancial corporations.^[3]

The net foreign assets of the other financial corporations rose by 6.1 percent quarter-on-quarter from ₱348.4 billion to ₱369.6 billion as the sector’s investment in foreign-issued debt securities increased. The said growth, however, was lower than the 14.5 percent expansion posted in the preceding quarter. Meanwhile, the sector’s other liabilities rose mainly due to the increase in shares and other equity issuances from a quarter ago.

On a year-on-year basis, the other financial corporations’ domestic claims rose, albeit at a slower pace of 17.8 percent in Q3 2023 from 19.2 percent in the preceding quarter. This was attributable to the expansion of its claims on the depository corporations, the private sector, and the central government.

In particular, the sector’s claims on depository corporations expanded amid the increase in its bank deposits and holdings of bank-issued equity shares.

Likewise, the other financial corporations’ claims on the private sector rose as its investments in equity shares issued by other nonfinancial corporations and loans to household sector grew. Moreover, the sector’s claims on the central government expanded on account of its higher investments in government-issued debt securities.

The net foreign assets of the sector expanded, albeit at a slower rate of 47.1 percent year-on-year in Q3 2023 from the 51.0 percent year-on-year in Q2 2023.

Meanwhile, the sector’s other liabilities grew substantially from the previous year, mainly on account of the increases in its issuances of shares and equity securities and insurance technical reserves.^[4]

By component, claims on the other sectors, specifically the other nonfinancial corporations, comprised the bulk of the other financial corporations’ domestic claims in Q3 2023 (Figure 2). This is followed by claims on depository corporations, and the central government.

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^[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 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 sectors are 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 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. Meanwhile, other resident sectors comprise the households and non-profit institutions serving households.

^[4] 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).