Trust sector’s total assets under management hits P1.071T

Total trust assets of banks and investment houses expanded by almost P200 billion to hit P1.071 trillion from January to June this year from P872 billion as of end 2006.

Trust assets are managed by most of the commercial banks with a handful of thrift banks and non-banking institutions such as investment houses. All are regulated by the Bangko Sentral ng Pilipinas (BSP).

In a report by the Trust Officers Association of the Philippines (TOAP), traditional trusts and other fiduciary accounts comprised P546 billion or 51 percent of the industry’s total resources.

Trust and other fudiciary accounts, or TOFA, include trust business generated from the industry trust departments’ appointment as trustee of various types of retirement, pension and provident funds and pre-need trusts, as trustee of living trusts and other personal and corporate trusts, as well as trustee of mortgage and collateral trusts and as facility and loan agent of various debt and equity issues.

Meanwhile, investment management accounts (IMAs) represent the second largest segment of the trust industry, accounting for P322 billion, or 30 percent of total industry resources.

“This sector actually grew by P146 billion, or 83 percent during this period, accounting for an increase in share of total trust accountabilities from 20 to 30 percent, an indication of how the investing public showed strong preference for banks’ and investment houses’ trust departments to act as their portfolio managers,” said Ma. Lourdes T. de Vera, president of TOAP and senior vice president of the Banco de Oro Unibank Inc.

De Vera added that the BSP policy of allowing trust entities to access the special deposit accounts or SDA facility to mop up excess liquidity in the financial system was the stimulus to the growth of this sector.

The trust industry’s pooled funds, offered as either money market, bond, balanced or equity funds, and denominated in both peso and dollars, and sold as unit investment trust funds (UITFs), was steady at P172 billion in total resources as of June 30, making up the balance of 16 percent of total industry figures.

TOAP, the umbrella organization of 44 trust institutions in the country and more than 250 individual trust practitioners, expects a better future for the industry.