Domestic claims of nonbanks climb in 4th quarter of 2022

DOMESTIC CLAIMS of non-bank financial firms climbed year on year in the last quarter of 2022, 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 P7.86 trillion in the fourth quarter of 2022, 8.1% higher than the P7.28 trillion seen in the same period in 2021.

This was also faster than the 3.1% growth logged in the previous quarter.

“The rise in the OFCs’ domestic claims in Q4 2022 was due to their higher claims on depository corporations (DCs), on central government and on other sectors,” the BSP said in a statement released late Friday.

Other sectors include the state and local government, public nonfinancial firms, and the private sector.

By component, claims on other sectors, particularly the private sector, made up bulk of OFCs’ domestic claims during the quarter, followed by claims on DCs and the central government.

Net claims on the central government increased by 11.7% to P1.88 trillion in the fourth quarter of 2022 but slipped by 0.2% from the prior three-month period.

Meanwhile, claims on depository corporations climbed by 21.2% year on year to P1.89 trillion. This was also 17.9% higher compared with the third-quarter level.

“In particular, the OFCs’ claims on DCs expanded owing mainly to the growth in the sector’s deposits in banks and holdings of bank-issued equity securities,” the BSP said.

“Likewise, the OFCs’ claims on central government grew on account of increased holdings of government securities. Similarly, the OFCs’ claims on other sectors, particularly, the private sector, rose slightly as loans extended to households and nonfinancial corporations increased,” it said.

BSP data showed net foreign assets (NFA) held by other financial corporations fell by 2.3% to P261.1 billion year on year but rose by 3.9% versus the previous quarter.

NFAs held by nonbank financial firms declined year on year as the sector’s liabilities grew faster than its claims on nonresidents, the BSP said.   

“The increase in the OFCs’ foreign liabilities was due mainly to higher loans payable to nonresidents,” the central bank said.

Claims of liabilities to non-residents grew by 23.5% to P192.99 billion year on year but dipped by 5.2% from the third quarter of 2022.

On the other hand, OFCs on non-residents rose by 7.2% to P454.09 billion and slipped by 0.1% quarter on quarter.

“The growth in foreign claims was primarily on account of increased investments in debt securities issued by nonresidents,” the BSP said.

“The expansion in the OFCs’ gross assets was funded mainly by its issuances of shares and other equity to other sectors,” it added.

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. — Keisha B. Ta-asan