What were they thinking of?

With panic withdrawals reaching about P30 billion from trust funds, the so-called UITF, why is the Bangko Sentral ng Pilipinas slow to act on the problem? A suspension on sales of the product is called for and greedy banks should be whipped for taking advantage of many unsophisticated depositors. I spoke to one of the tellers in Banco de Oro who admitted that their bank saw a stream of UITF depositors clamoring to get out. Some opted though to invest in the safer time deposit. Imagine how many retired school teachers or public servants probably invested in the UITF, mostly using their lifetime savings?

Of course the affected banks are blaming the BSP for precipitating the panic withdrawals by announcing that the public should be careful about investing in such products. Aside from warning the public, maybe the BSP should have already used its fabled "moral suasion" to stop the banks from selling the product. Rules on UITF investments should be tweaked to favor depositors and not the banks which are already making money off us by offering high interest rates while giving us low deposit rates. One percent per annum? That's ridiculous compared to the 18% interest on loans they charge! As in everything, it is the ordinary Pinoy who suffers the most.