Unit Investment Trust Fund Council a group of trust bankers in the Philippines will push for the adoption of global standards to help quantify and give an objective performance of its funds.

This developed as Rafael G. Ayuste Jr. Deputy Group Head of Metrobank’s Trust Banking Group said local investors have returned to the UITFs and the funds have recovered from the panic withdrawals of June and July. Of the 300 billion pesos [$6 billion] invested industry-wide then local banking sources estimated withdrawals of some 30 billion pesos [$600 million] in just a few days. Metrobank alone he told the Journal lost about 2/3 of the 90 billion pesos [$1.8 billion] invested by clients in UITFs from panic withdrawals. At present its UITF investments have recovered to 150 billion pesos [$3 billion].

Ayuste was among the large number of Filipino fund managers who attended the presentation on the Global Investment Performance Standards at the 6th Annual Pacific Regional Investment Conference of the Guam-based Asia Pacific Association for Fiduciary Studies. About half of the attendees were Filipino state pension fund officials fund managers trust officers in local banks and members of the Philippine Stock Exchange and was co-presented by the Financial Executives of the Philippines and Chartered Financial Analysts Philippines.

Daniel A. Roland senior vice president for investments of Citigroup Global Markets Inc. and an executive director of APAFS; said he was “ecstatic” over the attendance at the conference: “We certainly had over 300 people. This is the largest turnout … there was a lot of interest because of the quality of the speakers and the co-hosting by Finex and CFA which gave it a lot of credibility.”

He said that the site of the next conference will be a choice between the Federated States of Micronesia Seoul in South Korea or Singapore. 

Roland said he expected more Filipinos and other Asians to be members of the APAFS.

David Balangue president of Finex; also expressed satisfaction over the local turnout especially at the Global Investment Performance Standards presentations making him “confident that we can push GIPS among local institutions. In fact the Philippine capital markets have always wanted to be world class like Hong Kong Singapore. All the capital market centers in the world have already adopted GIPs. I think the Filipino capital market players would want to stand up to the challenge and it is something they would readily embrace.”

According to Louis Boulanger member of the Global Investment Performance Standards executive committee of the Chartered Financial Analysts Institute; GIPS is a “voluntary set of ethical principles on how firms measure the performance of its funds …” As it captures a fund’s historical data and standardizes measures on how fund’s perform it allows investors to make a good decision on whether or not to invest in a particular fund.

Thus Balangue said “foreign investors would be able to compare the performance of Philippine fund managers to the other companies ” he added.

To be Global Investment Performance Standards-compliant Ayuste said the Unit Investment Trust Fund Council “will draw up a blueprint and work with the Chartered Financial Analysts Institute.” The CFA oversees the compliance of GIPS around the world. Its institute offers a specific course program that trains professionals in measuring investment performance using GIPS standards.

In his speech where he briefed conference participants about GIPS Boulanger said “While it is a complex exercise and could be expensive for a company to undertake I don’t know of a single firm that was not pleased to have become GIPS-compliant.” The process becomes expensive he told the Journal because “potentially it could mean the overhauling of the entire financial system of a firm.”

He said fund managers will have less difficulty selling its products in the international market if they comply with these global set of standards. “It gives them a competitive edge over other fund managers ” he said. While these standards have been in existence since 1999 only fund managers in the U.S. and Europe as well as Australia have been using these standards. He said in Asia the local players in Hong Kong and Singapore are not GIPS-compliant although regional fund managers based there are. Twenty-six countries have already adopted GIPS principles and most of them have developed economies.

“By the end of 2006 we expect GIPS to be a truly global standard ” Boulanger told the conference.

The 6th Annual Pacific Regional Investment Conference was sponsored by ASC Trust Co. Atalanta Sosnoff BusinessMirror [Philippine media partner] Consulting Group DHJA First Hawaiian Bank Franklin Templeton Institutional Janus Intech Metropolitan West Capital Management LLC Kaplan Fox Richmond Capital Management Metrobank Glimpses Advertising and Glimpses Publications Great Lakes Advisors Inc. Milliman and RCM. Continental Airlines was the official carrier of the conference participants.  MBJ