Other assets reached P7.97 T in Q1 – BSP
Published Oct 6, 2019 12:00 am
By Lee C. Chipongian
The central bank said assets of “other financial corporations” (OFCs), which include non-money market investment funds and trust entities, amounted to P7.976 trillion of the total P31.044 trillion financial system resources in the first quarter 2019.
This is the first time the Bangko Sentral ng Pilipinas (BSP) released its Other Financial Corporations Survey (OFCS) which they started work on in 2014 to address the information gaps in reporting financial sector data.
Regulators such as the BSP closely monitor and tracks banking or other depository corporations (DCs), but not OFCs which are mostly unregulated.
The OFCS will help the BSP maintain a closer eye on OFCs which are particularly vulnerable to the build-up of risks. In tracking the anatomy of OFCs, which is one of the sub-sectors of the financial system (the other being DCs), the central bank will have a better handle on “shadow banking” or the unregulated side of the banking system.
The BSP said that after working with the International Monetary Fund (IMF) and other local agencies, they already have nine quarters of OFCS data starting from the first quarter 2017 until the first quarter 2019.
“With this release of the OFCS results, the Philippines is now the 64th country (out of the 189 IMF-member countries) that has reported the OFCS to the IMF,” said the BSP over the weekend.
The P31.044-trillion resources of the financial system include the P23.068-trillion total assets of the country’ DCs while the OFCs supplied the rest of assets.
“When consolidated with the data from DCs – OFCs 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 consolidation of all financial corporations’ data will result in an improved integrated monetary database,” said the BSP.
Preliminary results of the OFCS include OFCs’ net foreign assets (NFA) in the first quarter which reached P81.9 billion but it was 0.4 percent lower compared to P82.2 billion in the previous quarter.
The BSP said the lower OFCs’ NFA balance “stemmed from the 1.3 percent growth in the liabilities to non-residents which more than offset the 0.8 percent increase in the claims on non-residents.”
The OFCs’ claim on non-residents went up to P264.7 billion during the quarter from P262.7 billion in the previous quarter because of higher debt securities and insurance technical reserves (ITR). Liabilities also increased to P182.8 billion from P180.5 billion in the last quarter of 2018 because of the deposit liabilities to non-residents.
Domestic claims of the OFCs, in the meantime, increased by 4.1 percent to P5.953 trillion from P5.720 trillion previously.
Other liabilities of OFCs which are shares, other equity and ITR, totaled P6.034 trillion in the first quarter 2019, which was up four percent from P5.803 trillion in the previous quarter.
The BSP said they will regularly release the OFCS report within four months after the reference quarter.
“The OFCS is an important tool in identifying the concentration of vulnerabilities of the financial sector vis-à-vis the other sectors of the economy,” said the BSP.
OFCs are the following: 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.
This is the first time the Bangko Sentral ng Pilipinas (BSP) released its Other Financial Corporations Survey (OFCS) which they started work on in 2014 to address the information gaps in reporting financial sector data.
Regulators such as the BSP closely monitor and tracks banking or other depository corporations (DCs), but not OFCs which are mostly unregulated.
The OFCS will help the BSP maintain a closer eye on OFCs which are particularly vulnerable to the build-up of risks. In tracking the anatomy of OFCs, which is one of the sub-sectors of the financial system (the other being DCs), the central bank will have a better handle on “shadow banking” or the unregulated side of the banking system.
The BSP said that after working with the International Monetary Fund (IMF) and other local agencies, they already have nine quarters of OFCS data starting from the first quarter 2017 until the first quarter 2019.
“With this release of the OFCS results, the Philippines is now the 64th country (out of the 189 IMF-member countries) that has reported the OFCS to the IMF,” said the BSP over the weekend.
The P31.044-trillion resources of the financial system include the P23.068-trillion total assets of the country’ DCs while the OFCs supplied the rest of assets.
“When consolidated with the data from DCs – OFCs 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 consolidation of all financial corporations’ data will result in an improved integrated monetary database,” said the BSP.
Preliminary results of the OFCS include OFCs’ net foreign assets (NFA) in the first quarter which reached P81.9 billion but it was 0.4 percent lower compared to P82.2 billion in the previous quarter.
The BSP said the lower OFCs’ NFA balance “stemmed from the 1.3 percent growth in the liabilities to non-residents which more than offset the 0.8 percent increase in the claims on non-residents.”
The OFCs’ claim on non-residents went up to P264.7 billion during the quarter from P262.7 billion in the previous quarter because of higher debt securities and insurance technical reserves (ITR). Liabilities also increased to P182.8 billion from P180.5 billion in the last quarter of 2018 because of the deposit liabilities to non-residents.
Domestic claims of the OFCs, in the meantime, increased by 4.1 percent to P5.953 trillion from P5.720 trillion previously.
Other liabilities of OFCs which are shares, other equity and ITR, totaled P6.034 trillion in the first quarter 2019, which was up four percent from P5.803 trillion in the previous quarter.
The BSP said they will regularly release the OFCS report within four months after the reference quarter.
“The OFCS is an important tool in identifying the concentration of vulnerabilities of the financial sector vis-à-vis the other sectors of the economy,” said the BSP.
OFCs are the following: 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.