Banks’ trust assets grow to P5.7 trillion

THE Philippine banking system’s trust assets ended at a record high of P5.696 trillion in 2025 amid the continued expansion of unit investment trust funds (UITFs), data from the Bangko Sentral ng Pilipinas (BSP) showed.

This was up by 27.98% from the P4.451 trillion seen at end-2024 and was the highest level recorded so far.

This also rose by 17.03% from the P4.867 trillion recorded at end-September.

Of the end-2025 total, universal and commercial banks held P5.67 trillion in trust assets, rising by 28.17% from P4.424 trillion in the prior year.

Meanwhile, thrift banks had P25.892 billion, 3.33% lower than the P26.784 billion they managed in 2024.

“The double-digit growth in trust assets may be attributed to the further expansion of investments, especially UITFs, reflecting the increased need or shift from deposits in search for higher investment returns amid lower US, global, and local interest rates since (the) latter part of 2024,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said via Viber.

The US Federal Reserve has trimmed its borrowing costs by a cumulative 175 basis points (bps) since September 2024, with its target rate now at 3.5%-3.75%.

Meanwhile, the BSP delivered a total of 200 bps in cuts from August 2024 to December 2025 to bring the key rate to 4.5%. Last week, it reduced benchmark rates by another 25 bps, with the policy rate now at 4.25%.

“This also reflects the rising trend of the local stock market from the immediate low/bottom posted on Nov. 14, 2025, as well as lower bond yields towards the end of 2025, thereby leading to more investment or UITF gains that become more attractive amid lower short-term interest rates or deposit rates,” Mr. Ricafort added.

On Nov. 14, the Philippine Stock Exchange index finished at an over five-year low of 5,584.35 on concerns over the economic fallout from a corruption scandal involving flood control projects. It managed to rebound as the year wrapped up, closing the year at 6,052.92 on Dec. 29, which was the last trading day for 2025.

Bonds also rallied in late 2025 as growth concerns bolstered bets of further monetary easing by the BSP.

A trust business covers activities performed under a trustor-trustee arrangement, where a trustee manages funds or properties for the trustor’s benefit.

Banks or nonbank financial institutions may operate trust units, with industry assets made up of security investments, bank deposits and other holdings.

Based on BSP data, cash and due from banks nearly doubled year on year (92.1%) to P767 million at end-December 2025 from P398 million previously.

Net deposits stood at P1.476 trillion at yearend, 14.01% above the P1.294 trillion logged at end-2024, while net financial assets grew by an annual 11% to P2.858 trillion from P2.574 trillion.

Loans, including gross equity investments, inched down by 0.42% to P46.352 billion as of end-December from P46.548 billion in the comparable year-ago period.

Meanwhile, total accountabilities also stood at P5.696 trillion last year, with trust holdings climbing by 16.17% year on year to P1.817 trillion from P1.564 trillion.

This came as UITFs increased 25.22% year on year to P766.783 billion from P612.347 billion, while employee benefits went up by 7.93% to P382.527 billion from P354.422 billion.

BSP data also showed that agency trusts reached P2.393 trillion at end-2025, rising by 8.67% from P2.202 trillion the previous year.

On the other hand, other fiduciary services jumped by 127.94% to P1.424 trillion last year from P624.892 billion at end-December 2024.

Further easing by both the Fed and the BSP this year could attract more investments into UITFs and other trust funds, which would help drive the growth of banks’ trust assets, Mr. Ricafort said.

“Increased demand for other trust products and investments amid increased financial literacy or sophistication would lead to more demand for trust investments and other financial solutions,” he added. — Katherine K. Chan