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The domestic claims of other financial corporations (OFCs) increased by 6.1 percent to P9.872 trillion in the third quarter 2024 from P9.306 trillion in the previous quarter as investments in government-issued debt securities expanded, according to the Bangko Sentral ng Pilipinas’ (BSP) Other Financial Corporations Survey (OFCS).
The latest OFCs data is also higher compared to same period in 2023 of P8.817 trillion.
OFCs are private corporations and quasi-corporations whose principal activity is the production of market goods or non-financial services. The OFCS is a comprehensive measure of the claims and liabilities of the OFCs.
The BSP said the quarter-on-quarter growth in OFCs’ domestic claims was due to the increase in its claims on the depository corporations, the other sectors, and the central government.
The OFCs’ claims on the depository corporations grew as its holdings of bank-issued debt securities and equity shares increased, said the BSP. Depository corporations include the central bank.
Claims on the other sectors also increased because of the growth in equity investments in shares issued by other non-financial corporations (NFCs) and loans to households. The other sectors are the state and local government, public NFCs, and private sector.
Meanwhile, the OFCs’ net foreign assets went up by 1.7 percent to P486.5 billion in the third quarter 2024 versus P478.2 billion in the second quarter, mainly because of the rise in deposits with non-resident banks and investments in non-resident-issued equity shares.
The sector’s other liabilities also increased by 5.9 percent P10.359 trillion during the period because of the expansion in its shares and other equity issuances.
Data from the central bank noted that on a year-on-year basis, OFCs’ domestic claims rose 12 percent in the third quarter due to the increase in the claims on the depository corporations, the other sectors, and the central government.
“In particular, the other financial corporations’ claims on the depository corporations expanded as its deposits with the banks increased. Likewise, the 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,” said the BSP, adding that the sector’s claims on the central government also grew due to the increase in the investments in government-issued debt securities.
On a year-on-year basis, the net foreign assets went up by 31.1 percent while the other liabilities also rose by 12.7 percent.
The BSP said since they started the OFCS in 2019, they have noted a significant growth in the assets of OFCs. The first OFCS covered the first quarter of 2017 to the first quarter of 2019.
OFCs’ domestic claims have expanded by 96.2 percent in third quarter 2024 from P5.03 trillion in the first quarter 2017. The BSP said this reflected the sector’s “growing importance to the economy.”
Its other liabilities also grew by 106.3 percent in the third quarter 2024 compared to P5.022 trillion in the first quarter of 2017, as the sector’s shares and other equity issuances have continued to grow.
OFCs as defined by the BSP are 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, said the BSP.
