Bangko Sentral ng Pilipinas will allow unit investment trust funds to invest in derivative instruments.

The Philippine central bank said in a circular released March 14 that funds can invest in derivatives as long as financial derivatives are not primarily used as an investment strategy and that the risk level of the fund remains consistent with the risk profile of the investor fund.

Investing in derivatives should also be economically appropriate and the fund's exposure should be fully covered to meet any obligations.