The assets under management (AUM) of 30 trust entities rose 41.3% year-on-year to P4.6 trillion in March, led by unit investment trust funds (UITFs), the Bangko Sentral ng Pilipinas (BSP) reported Friday. 

In briefing, BSP Governor Benjamin E. Diokno said the total was equivalent to one-fourth of the assets of the banking system, indicating high levels of liquidity in the sector. 

Some 43.8% of the assets were invested in debt securities, 23.5% in equities and 23.4% in bank deposits, he said. 

“The notable growth in UITFs is a welcome development,” he said. 

“The BSP recognizes the importance of UITFs as an avenue for small retail investors to participate in the securities markets. Certainly, the online accessibility of UITFs contributed to their growth,” he added. 

At the height of the lockdowns in March 2020, AUM fell following the decline in the stock market and as investor preferences shifted in light of the heightened uncertainty. 

“The stable growth of the trust industry reflects the deep-rooted relationship between clients and trust entities, and the continued confidence of investors in the fund and asset management business,” Mr. Diokno said. 

The BSP continues to improve its regulatory framework for trust entities, with more regulations to be issued under its “Trust Business Model Initiative.” 

In June, the central bank issued two draft circulars aiming to streamline the requirements for financial institutions’ creation of UITFs. 

Mr. Diokno said regulators are also scheduled to release rules that will set comprehensive investment guidelines for trust entities; enhancements to the onboarding and client suitability assessment process; guidelines for measuring the performance of UITFs; guidance to align the management of UITFs with the International Organization of Securities Commissions’ Principles; as well as amendments to Personal Management Trust regulations. – Beatrice M. Laforga