The assets under management (AUM) of trust entities in the Philippines posted a year-on-year growth of 41.3 percent in March 2021, bringing industry AUM to Php 4.6 trillion. The growth was driven by unit investment trust funds (UITFs), which expanded by 59.0 percent year-on-year during the same period.
“The notable growth in UITFs is a welcome development. 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,” said BSP Governor Benjamin E. Diokno.
The Governor added that the stable growth of the trust industry reflects the continued confidence of investors in the fund and asset management business in the country.
Recognizing the pivotal role of trust entities in the deepening of the Philippine financial markets, the BSP supports the sustainable development of the trust industry by continuing to enhance the regulatory framework for trust entities.
Following the amendment of rules on “Investment Management Activities” (IMA) in February 2021, several additional policy reforms are anticipated, under what is known as the “Trust Business Model Initiative.”
These amendments aim to rationalize the operations of trust entities, provide an enabling regulatory environment conducive for financial innovation and growth of the trust industry, and encourage trust entities to be more responsive to the needs of the investing public.
The issuances will further underscore the importance of good governance, effective risk management, and stronger consumer protection.
Upcoming issuances shall include comprehensive investment guidelines for trust entities, enhancements to the onboarding and client suitability assessment processes, and guidance to better align the management of UITFs with international standards. – (BSP) rir
