The banking sector’s trust assets rose by 3.8 percent to P3.78 trillion as of end-September from same period last year of P3.64 trillion, based on Bangko Sentral ng Pilipinas (BSP) data.
Of this figure, the big banks accounted for P3.75 trillion while the thrift banks had P28.79 billion of trust holdings.
By BSP definition, a trust is a relationship or an arrangement whereby a person called a trustee is appointed by a person called a trustor to administer, hold and manage funds and/or property of the trust or for the benefit of a beneficiary. Trust business is any activity resulting from a trustor-trustee relationship or trusteeship. A bank's trust department carries out the trust and other fiduciary business of the bank. At the moment, the BSP supervises 30 trust entities.
The banking system’s net financial assets went up by 3.52 percent during the period at P2.41 trillion versus P2.33 trillion same time in 2021. Net loans rose to P80.97 billion, up by 11.25 percent from P72.56 billion.
Meanwhile, both cash and due from banks and the deposits in banks declined to P368 million and P764.65 billion, respectively, or down by 10.24 percent and 14.37 percent from P410 million and P893 billion.
Based on BSP data as of end-September, banks’ trust accountabilities fell by 13.65 percent to P1.52 trillion from P1.76 trillion. Of these trust accounts, the unit investment trust funds (UITFs) totalled P710.71 billion, which was lower by 22.44 percent from P916.40 billion last year.
In October this year, the BSP expanded the access of trust entities with non-resident funds to the BSP securities.
Basically, the BSP allowed UITFs of eligible trust departments of banks, regardless of whether the UITFs have funds from non-residents, to invest in BSP securities via the secondary market. They may purchase securities in the secondary market for any UITF in which the share of net assets of non-residents does not exceed 10 percent of the net assets of the fund.
BSP-monitored trust operations grew by 5.7 percent year-on-year to P5.1 trillion in the first six months of the year. This includes all trust companies not just banks’ trust units,
The BSP said this was a slower pace of growth compared to 18.4 percent in 2021 due to the slowdown in the increase of discretionary funds such as UITFs. The lingering uncertainty in the global market affected UITF investments.
The BSP said the six-month trust assets accounted for about 23.9 percent of the banking system’s total assets. These are considered “highly liquid” assets in the form of investment in securities and deposit in banks.