Domestic claims of nonbank financial firms rise in Q3 2023

DOMESTIC CLAIMS of non-bank financial firms climbed year on year in the third quarter of 2023 due to higher claims from depository firms, the central government, and other sectors, the Bangko Sentral ng Pilipinas (BSP) said.

Preliminary data from the BSP’s Other Financial Corporations Survey (OFCS) showed domestic claims of nonbanks rose to P8.82 trillion in the third quarter of 2023, 17.8% higher than the P7.48 trillion seen in the same period in 2022.

It also rose by 2.4% from the P8.61 trillion logged in the previous quarter.

The BSP said the year-on-year growth of nonbanks’ domestic claims is attributable to the rise of its claims on depository corporations (DCs), the private sector, and the central government.

The OFCS is an analytical survey of the assets and liabilities of the OFC sector. It uses standardized report forms as required by the International Monetary Fund.

These include individual financial statements from insurance firms, holding companies, government financial institutions, investment companies, and other financial intermediaries, as well as consolidated financial statements from trust institutions.

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

Claims on depository corporations surged by 40.7% year on year to P2.52 trillion and increased by 4.3% from the level seen in the second quarter of 2023.

Meanwhile, claims on other sectors rose by 9.9% annually to P4.4 trillion. It also increased by 1.2% from the previous quarter. Other sectors include the state and local government, public nonfinancial firms, and the private sector.

The year-on-year expansion was driven by the OFCs’ claims on the private sector, which jumped by 10% to P4.38 trillion in the third quarter last year.

The BSP noted that claims on the private sector increased as investments in equity shares issued by other nonfinancial firms and loans to the 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 BSP said.

OFCs’ net claims on the central government grew by 15.1% year on year to P2.17 trillion in the third quarter and rose by 3% from the prior three-month period.

By component, claims on the other sectors, specifically the other nonfinancial firms, comprised the bulk of the OFCs’ domestic claims during the quarter, followed by claims on DCs and the central government.

The other nonfinancial corporations refer to private corporations and quasi-corporations whose principal activity is the production of market goods or nonfinancial services.

Meanwhile, net foreign assets of OFCs rose by 47.1% annually to P369.643 billion in the third quarter from P251.249 billion in the same period a year earlier. It also grew by 6.1% versus the prior quarter.

Claims of OFCs on nonresidents rose by 19.8% year on year to P544.895 billion. Liabilities to nonresidents declined by 13.9% to P175.252 billion. — Keisha B. Ta-asan