Domestic claims of other financial corporations (OFCs) such as trust and insurance sectors increased by 5.7 percent in the second quarter this year to P7 trillion from P6.62 trillion same period in 2020, according to the Bangko Sentral ng Pilipinas (BSP).

The BSP, which released its latest Other Financial Corporations Survey (OFCS) over the weekend, said the increase in OFCs’ domestic claims was due to higher claims on the private sector and depository corporations.

The BSP said claims on the private sector grew by 10.7 percent during the period to P3.62 trillion from P3.27 trillion because of OFCs’ higher investments in equity and debt securities issued by private non-financial corporations. As for claims for depository corporations, this also went up by 6.3 percent to P1.79 trillion from P1.69 trillion due to higher holdings of bank-issued debt securities and increased deposits in banks.

The BSP said the net claims on the central government in the second quarter declined by 5.1 percent to P1.56 trillion from P1.64 trillion, mainly because of lower holdings of debt securities issued by the National Government.

In the meantime, OFCs’ net foreign assets rose by 77.4 percent to P186.1 billion from P104.9 billion in 2020 after a similar increase in the claims on non-residents’ investments in debt and equity securities.

“The increase in the OFCs’ assets was funded mainly by the sector’s issuances of shares and other equity,” noted the BSP. With the increase in equity issuances and insurance technical reserves, OFCs’ liabilities went up by 6.8 percent to P7.19 trillion versus P6.73 trillion in 2020.

The central bank’s OFCS measures the claims and liabilities of the OFCs.

The BSP defines OFCs as institutional units other than banks, non-banks with quasi-banking functions, non-stock savings and loan associations, and the central bank. It includes trust entities, private and public insurance corporations, holding companies, government financial institutions and non-money market funds covering unit investment trust funds and investment companies.

Source: Manila Bulletin (