Manila—(PHStocks)—Bangko Sentral ng Pilipinas (BSP) has released the 2012 Flow of Funds (FOF) Report, which presents a summary of financial transactions among the different institutions of the economy, between these institutions, and the rest of the world. It identifies which institutions are net borrowers and net lenders after a series of financial transactions for the year. Institutions are categorized into four, namely: 1) financial corporations, 2) non-financial corporations, 3) the general government, and 4) the households.
The economy’s savings momentum is sustained amid solid overall revenue performance of all sectors and the country’s sound macroeconomic fundamentals.
Domestic savings continued to expand by 6.8% to PhP2,001.3 billion. The household sector remained the top saver in the economy for the fifth consecutive year accumulating PhP928.9 billion in savings. This was partly brought about by the steady stream of overseas Filipinos’ remittances.
The non-financial corporations sector trailed behind, generating savings amounting to PhP713.4 billion due to the broad-based growth in savings across sub-sectors. The general government sector registered the highest growth in savings at 33.5% to reach PhP252.2 billion due to sustained generation of savings of the National Government (NG), Local Government Units (LGUs), and Social Security Agencies (SSAs). The financial sector also registered an impressive growth in savings of 17.5% at PhP100.6 billion due to increased revenue generation of top private life insurance companies and the steady stream of income of the other depository corporations.
Real investment continues to expand as the National Government infuses huge investments in infrastructure and other capital outlays.
The economy’s gross capital accumulation expanded by 7.7% to reach PhP1,691.9 billion in 2012. The household sector continued to be the economy’s largest real investor, accounting for 41.6% of the total gross capital accumulation. The non-financial corporation sector’s capital accumulation grew due mainly to business expansions and modernization and rehabilitation projects. Real investments of the financial sector fell by 19.5% to PhP31.2 billion on the back of sustained disposal of foreclosed properties by the banking sector. The slowdown in the sector’s capital accumulation was likewise reflected in the sharp drop in real investments of the monetary authority as purchases of non-monetary gold in the BSP’s gold buying stations significantly plunged by 91.6%. Meanwhile, capital accumulation of the general government sector rose markedly by 27.4% to PhP318.4 billion in 2012 as the NG accelerated disbursements for infrastructure projects and capital outlays.
All sectors are net lenders, except for the general government.
The household sector continued to be a net lender, with loans receivables as the desired form of asset acquisition. The non-financial corporation sectormaintained its net lending position, with fund provisioning activities largely reflected in the build-up of trade receivables, currency holdings and deposit placements. The financial sector’s net lending surged by 48.2% to PhP69.4 billion as the assets of rural and cooperative banks, other deposit-taking institutions, and the insurance sub-sector increased. The general government sector retained its net borrowing position at PhP59.9 billion on the strength of NG’s faster capital accumulation.
The domestic economy’s net lending to the rest of the world (ROW) aggregated PhP309.4 billion, a modest increase of 2.1% from the PhP302.9 billion in 2011.
The lower deficit in the country’s trade-in-goods account contributed to the overall net fund provision of the domestic economy to the rest of the world. The most preferred financial instruments were currency and deposits and securities other than shares, particularly, the depository corporations as main holders and the NG as the top issuer.