‘Stick to safe but little gain than be sorry’
By Jun Vallecera
Reporter

REGULATORS on Thursday advised people to keep to the regular deposit offerings of banks rather than invest in more exotic product lines that promise very high returns but are also more risky.
       The Bangko Sentral ng Pilipinas stressed this point as BSP governor Amando Tetangco Jr. said measures are in place requiring wealth managers to disclose in full to clients not just the benefits but also the risks of investing in UITFs.
       “There are disclosure requirements in the BSP circular,” Tetangco said in a telephone interview.
       Official sources, along with some from private banks, said most UITF investors have only themselves to blame for their misfortune, investing in something they ought to know as risky but going ahead just the same.
       “If you are going into something that promises more than the market, that should warn you something fishy is going on.
       “Our advice is for most people to stick to the regular deposit products of banks. They don’t pay much but they are a lot safer than UITFs,” a senior regulator said.
       The UITF business was having a party giving investors returns as high as 21 percent until interest rates retreated to such levels the past two weeks that no one wanted to be in it anymore.
       The big volumes that originally went in were roughly the same volume that wanted out, all at the same time—giving bank wealth managers massive headaches that alarmed even the regulators, sources said.
       Banks, local or foreign, extend 30-day special savings account deposit rates averaging as high as 5.17 percent at the moment versus week-ago rates averaging a high of 5.08 percent.
       These are really peanuts compared to UITF rates of 21 percent or even higher at some point in the recent past, officials said.
       The Bangko Sentral is already investigating the UITF mess, particularly reports claiming some banks promised guaranteed returns.
       “Past [UITF] performance is not a guarantee of better or higher returns in the future. Return is based on net asset value per share and this changes daily,” Chinatrust Bank president Joey Bermudez said earlier.
       Regulators, meanwhile, expressed doubt on whether supposedly sophisticated and moneyed people were duped into making UITF investments and have not been told in full of the perils of the business.