Debt securities held by PH creditors rose in Q3

The amount of debt securities held by private, nonbank entities in the country rose slightly in the third quarter of 2020 as the government and companies took on more borrowings to finance their programs amid the coronavirus pandemic.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said, based on preliminary data, the domestic claims of creditors classified as “other financial corporations” grew by 4.7 percent in the third quarter last year to P6,500.7 billion from P6,208.6 billion in the same period in the previous year.

“This increase is mainly attributed to the rise in the claims on central government, the private sector, and depository corporations,” the central bank said.

The data was contained in a survey that presented the comprehensive measure of the claims and liabilities of institutional units providing financial services other than banks, nonbanks with quasi-banking functions, nonstock savings and loan associations, and the central bank.

These institutional units are trust entities; private and public insurance corporations; holding companies; government financial institutions, specifically government-owned or -controlled corporations engaged in financial intermediation; nonmoney market funds covering unit investment trust funds and investment companies; and other financial intermediaries and auxiliaries consisting of offshore banking units and nonbanks without quasi-banking functions.

Claims on the central government rose by 10 percent to P1.644.7 billion from P1,495.4 billion a year ago.

“The upturn may be attributed to the increase in the sector’s holdings of debt securities issued by the central government,” the BSP said.

Likewise, claims on the private sector grew by 3.3 percent in the third quarter of 2020 to P3,206.4 billion from P3,103.8 billion in the same quarter of the previous year. This was mainly due to the build up of loans extended to households and higher investments in debt securities issued by private nonfinancial corporations. Moreover, claims on domestic corporations increased by 1.1 percent from P1,619.9 billion in the third quarter of 2019 to P1,637.3 billion in the same period of 2020 on account of higher holdings of debt securities issued by banks.

Meanwhile, the net foreign assets of other financial corporations rose by 40.8 percent to P140.9 billion from P100.1 billion in the third quarter of 2019. INQ