Based on preliminary data from the Other Financial Corporations Survey (OFCS), the domestic claims of the OFCs grew by 9 percent in Q1 2021 to ₱6,815.7 billion from ₱6,251.6 billion in Q1 2020 (Figure 1).1 This increase was mainly attributed to the rise in the claims on the private sector, and depository corporations (DCs) as well as the sector's net claims on central government (CG).2
Claims on the private sector grew by 12.8 percent in Q1 2021 to ₱3,493.5 billion from ₱3,097.8 billion in Q1 2020 due to higher investments by OFCs in equity and debt securities issued by private nonfinancial corporations. Likewise, claims on DCs expanded by 9.5 percent from ₱1,596.5 billion in Q1 2020 to ₱1,748.6 billion on account of OFCs' higher holdings of bank-issued debt securities and increased deposits. Moreover, net claims on CG rose by 0.8 percent from the previous year's level of ₱1,543.8 billion to ₱1,556.4 billion in Q1 2021. This slight upturn may be attributed to the drop in the liabilities of OFCs to the CG as well as the increase in the sector's holdings of debt securities issued by the CG.
Meanwhile, the net foreign assets (NFA) of OFCs rose by 42.6 percent to ₱156.2 billion in Q1 2021 from ₱109.5 billion in the same quarter last year. The growth was brought about by the increase in OFCs' claims on nonresidents, which were mostly in the form of investments in debt and equity securities, and insurance technical reserves (ITR).3
The increase in OFCs' assets was funded mainly by the issuances of shares and other equity. This increase in equity issuances, combined with the rise in the sector's ITR, led to a 9.6 percent rise in the other liabilities of OFCs, amounting to ₱6,971.9 billion in Q1 2021 from the ₱6,361.1 billion in Q1 2020.
1 The OFCS presents the comprehensive measure of the claims and liabilities of the OFCs. OFCs refer to institutional units providing financial services other than banks, non-banks with quasi-banking functions, nonstock savings and loan associations, and the central bank. These institutional units are: 1) trust entities, 2) private and public
insurance corporations, 3) holding companies, 4) government financial institutions (specifically government-owned or -controlled corporations engaged in financial intermediation), 5) non-money market funds covering unit investment trust funds and investment companies, and 6) other financial intermediaries and auxiliaries (consisting of offshore banking units and non-banks without quasi-banking functions).
2 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.
3 The ITR 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).