Philippine banks, investment houses and trust corporations expanded their trust assets by double-digits last year, outpacing the pre-pandemic growth, with industry leaders predicting further gains driven by a favourable macroeconomic outlook, according to a report from the central bank.
Assets of the 31 trust entities rose 16.3% to 6.2 trillion pesos (US$110 billion), buoyed mainly by securities issued by the government and private firms, which accounted for two-thirds of the total. The rest were from bank deposits and loans.
The asset growth was faster than the 5.7% gain in 2022 and the pre-pandemic average of 10.4%, the central bank, Bangko Sentral ng Pilipinas, says in a report on May 6.
Citing the Fund Managers Association of the Philippines and the Trust Officers Association of the Philippines, the report says industry leaders expect asset growth to improve this year on the back of a favourable macroeconomic outlook and the impact on the prices of stocks and bonds.
Meanwhile, the trust industry’s investments in debt and equities rose 17.3% to 4.1 trillion pesos last year compared to a 1.1% gain in 2022.
“This growth reflects the optimistic outlook of the industry and expectations of forthcoming accommodative policy measures,” the report says.
“Amid the changing preferences of trust clients, trust entities have been improving their products and services to remain competitive as well as to better serve the evolving needs of their clients,” it adds.
The trust industry’s net profit rebounded 3% to 7.4 billion pesos after a 2.2% drop in 2022, driven by a 13.7% rise in income. This was in spite of a 24.5% jump in expenses, primarily on employee wages and benefits.
