Claims of non-bank financial entities up

THE Bangko Sentral ng Pilipinas (BSP) reported that the domestic claims of other financial corporations (OFCS) grew 3.3 percent in the third quarter of 2022.

According to the OFC Survey (OFCS), these non-bank financial institutions had domestic claims of P7.49 trillion in the third quarter of 2022 from the P7.256 trillion posted in the same period in 2021.

The BSP said this growth was brought about by higher claims on the central government and the other sectors.

“In particular, the OFCS’ claims on the central government rose, following the increase in their holdings of government securities. Similarly, the OFCS’ claims on the other sectors grew slightly, owing to the increase in loans extended to the private sector, i.e., the households and nonfinancial corporations,” the BSP said.

BSP added that OFCS’ claims on depository corporations declined in the July to September period in 2022 from 2021 due to the decrease in their holdings of bank-issued debt securities and bank deposits.

By component, the data showed claims on the other sectors, particularly the private sector, comprising the bulk of the OFCS’ domestic claims, followed by claims on the central government and depository corporations.

The OFCS’ net foreign assets increased significantly by 28.4 percent to P246.9 billion in the third quarter of 2022 from P192.3 billion in the third quarter of 2021.

This was largely due to the expansion in its investments in debt as well as shares and other equity securities issued by non-resident entities.

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

The BSP explained that OFCS 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 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.

Other Sectors cover the following: (a) state and local government, (b) public nonfinancial corporations, and (c) private sector.

The private sector is composed of other nonfinancial corporations, and 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.