By Bjorn Biel M. Beltran, Special Features and Content Assistant Editor, BusinessWorld

For quite some time now, the investment community has been in a near-constant state of agitation. Coming from the throes of the pandemic, dealing with its aftermath in the skyrocketing inflation and interest rates, and facing global geopolitical conflicts that disrupted economies worldwide, investors are understandably wary of any further risks to their portfolios.

For a developing economy like the Philippines, however, this presents a problem. The country needs both foreign and local investors to fuel its economic momentum. It is in attracting engaged and deep-pocketed investors can it bolster the development of the high-impact industries (e.g., renewable energy, manufacturing, or infrastructure), which is much needed to sustain its long-term prosperity.

But in a global investment landscape dominated by uncertainty, such a task is difficult.

The limits of digital financial inclusion

In an interview with BusinessWorld, Rafael G. Ayuste, Jr., who has previously served as the president of the Trust Officers Association of the Philippines, noted how in the past twelve months, those investing in equities were far more likely to lose money rather than earn.

“Out of the 37 [equity] funds in the market, only 11 are giving you a positive return. The remaining 26 are actually giving you negative returns on your investment. So basically, what it’s saying is that there’s a higher chance that you will lose money than a chance of gaining money on your investment,” he said.

Technology has made the investment market more accessible than ever. Mr. Ayuste pointed out that fintech brand GCash has popularized the idea of micro-investments by allowing anyone with an account to invest in the market for as low as P50.

The popular e-wallet platform announced last year that it has taken on as many as 800,000 investors since launching the service, collectively earning more than P12 million as of July 2024. This was corroborated by the Philippine Stock Exchange, which noted that more retail traders created accounts to invest in the local bourse because of the platform.

“But even with that access, without understanding, without financial education, the advantages of that digital platform are actually quite limited,” Mr. Ayuste said.

Accessibility without financial literacy is a double-edged sword, he noted. Without a solid understanding of risk, many first-time investors may become disillusioned after experiencing losses, potentially pushing them away from investing altogether. 

A more financially literate investor base would be better equipped to diversify into safer, fixed-income assets like bonds. But, without proper education, many will remain vulnerable to current market volatility—and miss out on building long-term wealth. 

The Trust Officers Association of the Philippines (TOAP), established in 1964, is one of the country’s oldest and most respected professional organizations in the financial sector. It serves as the unifying body for institutions engaged in trust, investment management, and fiduciary services, with all member-institutions licensed by the Bangko Sentral ng Pilipinas (BSP).

TOAP works closely with the BSP and other regulatory bodies to address emerging issues, shape industry regulations, and ensure that the Philippine trust and investment management sector evolves responsibly while prioritizing the interests of the investing public. One of the key missions of the association is to promote the continued development of the Philippine capital markets through financial literacy and sustainability.

Mr. Ayuste stressed that financial education should be embedded in the grassroots level, targeting younger generations who can still develop better financial habits, unlike older generations who were introduced to digital finance without a foundational understanding of saving and investing.

“Education has to go very deep into the psyche of the Filipinos,” he said, adding that it is a difficult mindset shift for Filipinos used to the instant gratification of modern life. “Investing does not give you a reward immediately. It takes time. Maybe half a year. Maybe one year, maybe five years. That’s the length of time that you need to see your investment grow.”

The bigger picture of sustainability

Speaking broadly, Mr. Ayuste noted that the role of trust officers today is more important than ever.

“The volatility is a staple. We see volatility as part of our day-to-day activities. Managing volatility or being able to ride through volatility is a staple for the trust and asset management industry,” he said.

An investment is inherently a long-term proposal. Trust officers and asset managers need to look forward into perpetuity to ensure they uphold their fiduciary duty. Sustainability, then, is a natural fit.

“The Philippines is ranked 17th in terms of risk arising from climate change. We are an archipelago that is used to typhoons, used to flooding in the cities and the countryside. Unfortunately, because we have been too resilient, we have somehow decided that we will just go with the flow,” he said.

Just as financial literacy empowers investors to make informed decisions, it also plays a crucial role in shaping investment behaviors that align with long-term sustainability. Environmental, social, and governance (ESG) investing should thus play a bigger role in financial decision-making. Mr. Ayuste said that the Philippines must encourage investments in companies with strong ESG principles, ensuring that economic growth aligns with climate resilience and sustainability.

He lamented that ESG awareness in the country is still low, as Filipino investors still prioritize return on investment rather than long-term sustainability.

“We are just at the tip of the iceberg between looking at the return potential of an investment and ESG. We are still leaning towards the return on investment; but in the long term, we should start looking at ESG as a strong component of our investment portfolio,” he noted.

To drive meaningful change, financial institutions, regulators, and investors must work together to integrate ESG into investment strategies, ensuring that profitability and sustainability go hand in hand. And as stewards of the country’s capital, the trust and investment management industry play a role in pushing forward.

The trust professionals in TOAP, in particular, are uniquely positioned to take up the mantle. In an era of growing uncertainty, helping investors manage risk and protecting the interests of the investing public—all while fostering sustainability—are all part of the association’s primary responsibility.

“It goes back to financial education,” Mr. Ayuste said. “Not just investing for the return on investment, but the investing for the future as well.”

This article is in the special edition of BusinessWorld In-Depth digital magazine, in celebration of Trust Consciousness Week. To get the full issue for FREE, visit https://bworld-x.com/product-category/bw-in-depth-industry-report.

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

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By Mhicole A. Moral, Special Features and Content Writer, BusinessWorld

Businesses are now recognizing the value of embedding environmental, social, and governance (ESG) considerations into their operations to drive financial and reputational benefits.

While the scope of ESG is broad—spanning climate change, biodiversity, human rights, labor standards, and corporate governance—companies that focus on the most material aspects of their industry tend to see greater success. A report from EY-Parthenon said that ESG factors significantly influence financial performance, especially in investment decisions.

Investors also favor companies that demonstrate a genuine commitment to sustainability, often leading to a lower cost of capital. Businesses that integrate ESG into their strategies can strengthen stakeholder confidence and reduce risks related to reputational damage and regulatory pressures.

Trust institutions, by managing assets, investments, and wealth, can support companies in refining their ESG disclosures. By doing so, they help businesses attract investors who prioritize sustainability.

Such entities can also contribute by directing funds into sustainable ventures. They have the capacity to support projects aimed at reducing greenhouse gas emissions and funding climate resilience initiatives.

ESG’s impact in decision-making

Despite ESG’s growing importance, its role in investment decision-making remains modest. According to HSBC’s report, ESG analysis scored 4.0 in June 2024, a slight decline from 4.7 in February 2023. While ESG remains a crucial consideration, its integration into financial decisions continues to evolve. The data also highlights ongoing challenges in quantifying ESG’s impact on investment performance that shape the strategies of trust institutions.

Geopolitical factors also influence sustainability initiatives. HSBC’s findings reveal that 41% of respondents reassessed their ESG strategies due to global tensions, while 35% cited these tensions as a major obstacle to progress. Meanwhile, 21% said geopolitical instability has increased attention on sustainability issues, with only 14% reporting no impact and 12% noting that progress had accelerated as a result.

Shareholders are also demanding greater transparency and accountability in ESG commitments. The report shows an 11% rise in environmental-related shareholder proposals in 2023, with transition plans becoming a key focus. Shareholders are exerting pressure on firms, particularly those in carbon-intensive sectors, to establish and disclose targets aligned with the Paris Climate Agreement. Trust institutions, acting as fiduciaries, bear the responsibility of ensuring that the assets they manage align with these evolving investor priorities.

Investor confidence in ESG reporting also remains critical in driving sustainable investment decisions. HSBC’s research shows that 62% of respondents believe auditing and assurance of corporate sustainability disclosures would be beneficial. At the same time, 60% are satisfied with the current fund labeling system, indicating that existing classifications provide a reasonable level of transparency.

Meanwhile, artificial intelligence is becoming a consideration in sustainability research. According to the report, 36% of respondents are exploring AI as part of their ESG analysis. This way, companies are highlighting AI’s potential role in refining investment strategies and assessing sustainability risks more effectively.

The report also points to an ongoing debate about the terminology surrounding ESG. About 35% of respondents believe that ESG should be replaced with an alternative framework, indicating that some investors find the current classification inadequate or too broad to be meaningful in financial decision-making.

Meanwhile, an analysis of 130 reports from 11 financial research providers revealed that all of them consider ESG factors in their assessments. Additionally, six providers explicitly integrate ESG considerations into their valuation models, emphasizing the need for clear evidence linking sustainability to business performance.

Traditional ESG integration faces challenges in aligning with performance metrics, prompting a shift toward thematic investments, labeled securities, and impact-focused strategies.  Meanwhile, trust institutions are increasingly adapting to these trends by incorporating sustainability considerations into their investment frameworks.

Investment strategies for sustainability

A report by International Finance Corp. (IFC) shows that 71% of the world’s largest companies now disclose their alignment with the SDGs. The report mentioned that banks and trust entities can contribute through impact investing, green finance, and SDG-aligned investment strategies. Trust institutions can also support the expansion of climate finance.

IFC’s involvement in the Philippines has also led to investments in renewable energy, green bonds, and sustainable infrastructure. Projects like green housing, climate-smart agriculture financing, and disaster resilience initiatives align with the broader goal of ensuring long-term sustainability.

Through partnerships with regulators, trust institutions can further integrate ESG principles into their governance frameworks, particularly in the Philippines, where climate risks are factored into financial sector regulations and capital allocation decisions.

Decarbonizing sectors is another key area where trust institutions can contribute, according to IFC. Investments in electric mobility and energy-efficient buildings can reduce carbon footprints.

While the pace of new ESG-focused fund launches has slowed, regulatory developments such as the European Union Deforestation Regulation (EUDR) and the Carbon Border Adjustment Mechanism (CBAM) are expected to influence how companies structure their portfolios. Trust institutions, operating in a highly regulated financial sector, are suggested to navigate these changes while maintaining transparency and accountability in their investment strategies.

The growing emphasis on thematic investments, shareholder activism, and the demand for more transparent sustainability disclosures indicate that ESG considerations will remain significant to financial decision-making.

Strengthening ESG compliance

The Philippine government has taken steps to encourage businesses, including trust institutions, to align with ESG principles. Key regulators such as the Securities and Exchange Commission (SEC), the Bangko Sentral ng Pilipinas (BSP), the Insurance Commission (IC), and the Department of Environment and Natural Resources (DENR) have introduced measures to improve ESG compliance across the private sector.

Trust institutions, including banks and insurance companies, operate under stringent guidelines to ensure sustainability in their operations and investment decisions. They are also required to integrate sustainability principles into their corporate governance frameworks, risk management systems, and strategic objectives.

The BSP’s Manual of Regulations for Banks mandates financial institutions to approve Environmental and Social Risk Management System policies. These policies guide banks in identifying, assessing, and mitigating exposure to environmental and social risks.

In 2023, the central bank increased the single borrower’s limit for green or sustainable projects by an additional 15%, encouraging more investments in environmentally responsible ventures. The following year, the BSP introduced the Philippine Sustainable Finance Taxonomy Guidelines, which provide banks with a structured approach to financing sustainable projects.

Trust institutions managing investment portfolios are expected to align with these frameworks, directing funds toward projects that promote renewable energy, resource efficiency, and climate resilience.

This article is in the special edition of BusinessWorld In-Depth digital magazine, in celebration of Trust Consciousness Week. To get the full issue for FREE, visit https://bworld-x.com/product-category/bw-in-depth-industry-report.

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

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By Jomarc Angelo M. Corpuz, Special Features and Content Writer, BusinessWorld

Managing the trust of some of the biggest banks in the Philippines requires keen attention to detail, fidelity to the client, and exemplary professionalism. After all, they are tasked with the difficult duty of administering trusts in good faith in accordance with the terms and purpose of the trust instrument, while balancing the interests of the trust beneficiaries. Because of this, trust officers boast the confidence of their trustors and are held accountable by the trustees.

The Trust Officers Association of the Philippines (TOAP) is bestowed with the highest fiduciary mandate and works in close coordination with the Bangko Sentral ng Pilipinas (BSP). The association aims to elevate the trust and asset management industry in the country to a level at par with international standards by actively contributing to the development of the capital markets and promoting the interests of its customers and the investing public.

The TOAP’s mission is to respond to the changing needs and remain committed to the interests of its clients; to advance the professional growth and development of its members; as well as provide a dynamic and robust environment conducive to growth for its constitutional members.

The premier association of trust officers in the country hopes to become the authoritative private sector association in trust, fiduciary, and asset management not only in the Philippines but also in the Asia Pacific region. Its vision includes becoming a prominent driver and catalyst of change in the fiduciary and financial markets; a developer of competent, knowledgeable, and qualified professionals; an enforcer of the highest level of ethical standards; and a trusted educator of clients.

After six decades of actively enhancing the Philippine financial management industry, TOAP commits to focusing on and strengthening key areas that seemingly attract the next generation of investors and trustees, namely: digital transformation, sustainable and responsible investing, and enhanced customer engagement.

Digitizing operations, implementing online platforms for client interactions, and leveraging data analytics are among the innovations that the TOAP seeks to implement on its journey toward digital transformation. With 70% of the Philippine population being Generation Zs or millennials, adapting to the needs and attracting the younger generation involves diving into social media and posting materials tailored to appeal to those markets.

Two years ago, the association launched a six-month digital marketing ad campaign aimed at reintroducing UITFs in the market from July to December 2023. The series featured witty captions, posts, and videos explaining various financial topics such as setting financial goals, making smart investments, understanding class assets, and debunking myths about the industry.

Similarly, TOAP is committed to advocating for responsible investing practices to align investments with its environmental, social, and governance (ESG) criteria. In this regard, the association actively promotes the Personal Equity and Retirement Account (PERA) Act of 2008, a voluntary retirement savings program that supplements the existing retirement benefits from the Social Security System (SSS) and the Government Service Insurance System.

Additionally, TOAP consistently gives back to nature as evidenced by its corporate social responsibility programs. Last year, the association helped restore the environment, plant trees, and connect with the Dumagat indigenous community during the TOAP’s Green CSR Day at the Mount Purro Nature Reserve.

Efforts on deploying customer relationship management (CRM) systems, conducting client feedback surveys, and offering educational resources are also eyed by the TOAP to help clients make informed financial decisions and have better overall financial service experience.

Building on these mission, vision, and objectives, the TOAP holds several programs that promote and encourage savings and investments as well as stages various symposia and conferences where regulations and current issues are discussed to ensure that the industry can progressively evolve in the best interest of the investing public.

Chief among them is the association’s annual TOAP Summit where industry leaders gather to connect, discuss trends, and explore the future of fintech in the trust and asset management sector. Held during the week of the association’s anniversary, the summit’s previous edition had the theme “Trust: Balancing Wealth and Global Accountability.”

The Asia Pacific Association for Fiduciary Studies (APAFS) Pacific Region Investment Conference, co-hosted by the TOAP, is another event that advances the association’s advocacy of financial literacy and empowering investors. Last year, APAFs held the event at the peak of the 2024 Fiduciary Events Week in Manila to serve as a valuable platform for networking with fellow fiduciaries across the region. The 2025 Fiduciary Events Week will be on Nov. 17-21, and within this week the 23rd Annual Pacific Region Investment Conference will take place on Nov. 20-21.

Serving the country for more than 60 years, the TOAP has driven growth and created a more inclusive financial industry in the Philippines. By pushing for digital transformation, responsible investing, and enhanced customer engagement, the association hopes to advance the sector further and take the trust, fiduciary, and asset management industry in the Philippines to new heights.

This article is in the special edition of BusinessWorld In-Depth digital magazine, in celebration of Trust Consciousness Week. To get the full issue for FREE, visit https://bworld-x.com/product-category/bw-in-depth-industry-report.

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

Join us on Viber at https://bit.ly/3hv6bLA to get more updates and subscribe to BusinessWorld’s titles and get exclusive content through www.bworld-x.com.

Standard Chartered Bank (SCB) Philippines recently hosted its Global Research Briefing at the Makati Shangri-La Hotel. Themed ‘Reverberations,’ the briefing highlighted the far-reaching implications of the new US protectionist policies and impact to the global markets.

Distinguished panel of speakers include Bangko Sentral ng Pilipinas (BSP) Deputy Governor for Monetary and Economics Sector Dr. Francisco G. Dakila, Jr., who delivered the keynote presentation. He was joined by SCB’s Chief Economist and Head of FX for ASEAN and South Asia Edward Lee, and Asia Economist and FX Analyst Jonathan Koh, who shared the bank’s views on the global, regional, and Philippine economic outlook for the year.

The bank’s economists expressed cautious optimism regarding the country’s economic outlook amid uncertainties brought about by US economic policies, citing that 75% of the Philippine economy is driven domestically.

Mike Samson, Chief Executive Officer, Standard Chartered, said, “We are pleased to be hosting this Global Economic Briefing in the Philippines at this crucial time. The theme for this year’s economic briefing is ‘Reverberations,’ which reminds me of how a pebble, thrown in a lake, can cause great ripples. With the new US protectionist policies and geo-political developments throughout the world, these pebbles are more like boulders that signal a new chapter for global trade. I thank our Keynote Speaker Bangko Sentral ng Pilipinas Deputy Governor of the Monetary and Economics Sector Dr. Francisco G. Dakila, Jr. and our Global Research team for sharing their views on the far-reaching implications of the US policy shifts, China and ASEAN prospects and outlook for 2025.”

SCB organizes economic briefings biannually to provide its corporate and financial institution clients with expert analysis and foresight on economic trends, helping them make informed decisions in an increasingly complex global environment.

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

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