Retirement Funds Assets grew 40% in last 5 years

The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) has released its 2018 Statistical Bulletin which is produced annually. The Bulletin shares statistical data collected from regulated entities over a five year period, in this case 2013-2017. The data is useful for evaluating the performance of the industries within the Non-Bank Financial Institutions (NBFI) sector. Additionally, it provides insights for stakeholder groups including business market researchers, academics and policy makers amongst others.

“As regulators we have a broad range of stakeholders and we are cognizant of their divergent needs. We not only regulate and supervise the Non-Bank Financial Institutions sector, but also endeavor to share information to help our stakeholders make informed decisions. The Statistical Bulletin is one of the flagship publications we produce to assist in policy making, monitoring the financial performance and therefore stability of the NBFI sector, as well as to assist researchers in bridging the knowledge gap,” said Oaitse Ramasedi, Chief Executive Officer of NBFIRA.

NBFIRA CEO Oaitse Ramasedi

The Statistical Bulletin highlights that the Life and General Insurers’ gross written premiums grew by 34% between 2013 and 2017, from P3.7 billion to P5 billion. This was the result of various factors including new entrants into the market. The growth was however, diluted by the 4% decline in premiums recorded between 2015 and 2016. This decline was due to a 5% decrease in the life and annuity premiums.

Assets Under Management (AUM) of Asset Managers and Management Companies indicate that Collective Investment Undertakings (CIU’s) grew significantly between 2013 and 2017, registering an increase of 53%. Discretionary Assets of Non-Collective Investment Undertakings on the other hand, registered a decrease of 11.7%, following the re-channelling of BPOPF’s mandate to invest directly in the market. This decrease offset the CIU’s growth resulting in the moderate decrease of total AUMs by 6.1%, from 56 billion in 2013 to 52 billion in 2017.

Retirement Funds Assets grew by 40% during the period under review, largely driven by an increase in membership contributions and rising investment returns. Offshore investments grew by 57% over the past five years, while local investment assets grew by 17% during the period.

“The slow growth in the local assets can be attributable to limited options of investment instruments in the local market and an appetite for better returns from offshore markets. This resulted in the offshore – onshore split of investment assets to widen from 59%/41% to 66%/34% in 2017 which is still within the 70%/30% pension fund investment rule.”

NBFIRA began its operations in 2008 and since then has achieved significant regulatory and supervisory milestones that have enabled the NBFI sector to grow and operate in line with international standards and best practices. The Authority oversees the NBFI sector, which in 2017 had assets worth approximately P123 billion, accounting for 57% of total assets in the local financial system. In 2018, the sector comprised of 775 active entities.