Assets of non-bank financial firms reach P8 thousand in Q1

MANILA, Philippines — Total assets of other financial corporations including insurance providers, investment companies, trust institutions investment houses, securities dealers and pawnshops accounted for a quarter of the total resources of the country’s financial system.

Data from the Bangko Sentral ng Pilipinas (BSP) showed assets of other financial corporations reached P7.97 trillion in the first quarter of the year, accounting for 25.7 percent of the total financial system which amounted to P31.04 trillion.

Preliminary data also showed that the total assets of the country’s depository corporations amounted to P23.07 trillion in the same period.

Other financial corporations comprise of trust entities; private and public insurance corporations; holding companies; government financial institutions, specifically government owned or controlled corporations engaged in financial intermediation; non-money market funds covering unit investment trust funds and investment companies; and other financial intermediaries and auxiliaries consisting of offshore banking units and non-banks without quasi-banking functions.

“When consolidated with the data from the Depository Corporation Survey, other financial corporations represent around a quarter of the total assets in the country’s financial system, a summary on the claims and liabilities of the entire financial corporations sector can be generated,” the BSP said.

The survey of other financial corporations is an important tool in identifying the concentration of vulnerabilities of the financial sector vis-à-vis the other sectors of the economy, the BSP said.

“The consolidation of all financial corporations’ data will result in an improved integrated monetary database,” the central bank added.

Statistics showed net foreign assets of the other financial corporations slipped 0.4 percent to P81.9 billion in the first quarter of the year from P82.2 billion in the fourth quarter due to the 1.3 percent growth in the liabilities to nonresidents, which more than offset the 0.8 percent increase in the claims on nonresidents.

The 0.8 percent expansion in the claim on nonresidents of other financial corporations to P264.7 billion from P262.7 billion was due to the sector’s higher holding of debt securities and insurance technical reserves, BSP data showed.

On the other hand, the 1.3 percent increase in liabilities to P182.8 billion from P180.5 billion to non-residents was mainly driven by the deposit liabilities to non-residents.

Domestic claims of the other financial corporations expanded by 4.1 percent to reach P5.95 trillion from P5.72 trillion due mainly to the 11.1 percent increase in the sector’s net claims on central government, a 2.2 percent rise in claims on other sectors, and by the 1.9 percent increase for other depository corporations.

Data showed net claims on central government booked a double-digit 11.1 percent increase to P1.37 trillion from P1.23 trillion as other financial corporations particularly trust entities, boosted investments in debt securities issued by the central government during the quarter.

Meanwhile, the 2.2 percent rise in claims on other sectors was attributed to the increase in the claims on private sector, was driven mainly by other financial corporations’ placement in equity and debt securities issued by private companies.

Other liabilities of other financial corporations expanded by four percent to P6.03 trillion in the first quarter from P5.8 trillion in the fourth quarter.