The non-banking sector’s trust holdings went up by 6.96 percent to P1.42 trillion as of end-September versus P1.33 trillion same period last year, based on Bangko Sentral ng Pilipinas (BSP) data.
According to BSP rules and definition, a bank or non-bank such as investment houses can be specifically designated to have a business unit to perform trust functions. A trust is 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.
These non-banks with trust authority from the BSP reported P1.17 trillion net financial assets during the period, up by 8.39 percent from last year’s P1.08 trillion. Its total net loans also increased by 12.88 percent to P44.45 billion from P39.37 billion in 2021.
However, non-banking trusts’ deposit in banks of P178.62 billion for the first nine months was lower by 2.32 percent compared to same period last year of P182.86 billion.
Based on BSP numbers, as of end-third quarter, non-banks' trust liabilities amounted to P577.45 billion, down by 7.70 percent from P625.45 billion same time in 2021. Unit investment trust funds (UITF) also fell by 9.51 percent to P343.01 billion from P379.08 billion.
The BSP currently supervises five non-bank financial institutions with quasi banking functions such as investment houses with trust functions. There are also 1,334 non-banks without quasi banking functions, of which two are investment houses with trust function.
BSP reported earlier that 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.
The big banks accounted for P3.75 trillion while the thrift banks had P28.79 billion.
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.
Also as of end-September, banks’ trust accountabilities fell by 13.65 percent to P1.52 trillion from P1.76 trillion. Of these trust accounts, UITFs totalled P710.71 billion, which was lower by 22.44 percent from P916.40 billion last year.
Last October, 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.