Increase in assets 3X better than GDP Q1 growth — analyst
THE assets of Philippine banks’ trust and other fiduciary businesses expanded by 18.7 percent to P4.69 trillion in March 2025 from P3.95 trillion in March 2024, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.
On a quarter-on-quarter basis, trust assets increased by 5.4 percent in March from P4.45 trillion in December 2024.
According to the BSP, a trust business refers to a fiduciary relationship in which legal title to the trustor’s funds and/or properties is transferred to the trustee.
Banks or nonbank institutions, such as investment houses, can be designated to have a business unit to perform trust functions. Securities and bank deposits make up the bulk of the trust industry’s assets.
All segments up
BSP data showed “cash and due from banks” surged 46 percent to P584 million in March 2025, from P400 million a year earlier, and also grew by 46.7 percent from the end-December 2024 level of P398 million.
Total deposits climbed by 14.6 percent to P1.18 trillion from P1.03 trillion in the comparable year-earlier period. On a quarterly basis, however, deposits declined by 8.5 percent from P1.29 trillion posted in December 2024.
Trust holdings stood at P1.62 trillion as of the end of March, 16.5 percent higher than the P1.39 trillion posted a year earlier. These holdings also rose by 3.8 percent from the quarter-earlier P1.56 million.
Unit investment trust funds (UITFs) jumped by 35.6 percent to P659 million in March 2025, from P486 million a year earlier, and by 7.7 percent from P612 million the prior quarter.
Better than GDP
Michael Ricafort, RCBC’s chief economist, pointed out that the increase in assets of trusts and other fiduciary businesses of Philippine banks “is more than 3 times better than GDP growth of +5.4 percent in the first quarter of this year.
“This may reflect growth in investments, such as UITFs that are based on both local and international financial markets, as well as other trust funds that give local investors more choices, flexibility, and diversification,” Ricafort said in a Viber message.
UITFs are investments where investors pool their money to be managed by professional fund managers. These funds invest in various securities like money market instruments, bonds, and stocks.
Improving confidence
“Sustained growth in trust and fiduciary assets reflects improving investor confidence and institutional demand for professional fund management amid macroeconomic uncertainty,” John Paolo Rivera, senior research fellow at the Philippines Institute for Development Studies, said.
Rivera pointed out that the year-on-year jump of 18.7 percent suggests that “more entities, both corporate and high net worth individuals, are parking funds in professionally managed instruments.”
“These are possibly seeking diversification and yield in a high-interest rate environment and also signal growing maturity in Philippine capital markets,” Rivera said.
“We expect continued growth in this segment, especially if market volatility persists and as more Filipinos turn to managed investments for long-term financial goals,” Rivera added.
Stable outlook
Moody’s Ratings earlier maintained a stable outlook for the Philippine banking system, citing the country’s strong economic growth, fiscal consolidation efforts and robust macroeconomic fundamentals.
Moody’s said that local banks’ overall asset quality will remain steady, but risks will vary between larger and smaller banks, as stated on March 13.
Policy rate cuts, Moody’s said, will support borrowers’ debt repayment capacities, “which will mitigate potential loan quality deterioration from the newer retail and SME loans.”
“In particular, retail loans have been growing at 35 percent over the past two years, posing loan seasoning risks. The quality of loans to large conglomerates will remain solid, notwithstanding the concentration risks they pose to banks,” Moody’s said.
Meanwhile, Moody’s said local banks’ capital levels will remain high, “as strong shareholder support and internal capital generation keep pace with high credit growth.”
Moody’s rates eight commercial banks in the Philippines, which, together accounted for nearly 66 percent of total banking assets at the end of December last year.
These banks are BDO, BPI, Metrobank, Chinabank, RCBC, Security Bank, PNB, and Union Bank.
