RCBC Urges Firms to Manage FX and Trade Risks Amid Global Shocks

Rizal Commercial Banking Corporation (RCBC) has advised Philippine businesses to prioritize cash flow management and trade finance strategies to navigate geopolitical instability and currency volatility. During economic briefings in Cebu and Bacolod, bank executives emphasized that matching financing solutions to a company's specific supply chain position is essential for protecting liquidity and margins. This focus on supply chain resilience comes as the bank prepares to digitize its trade finance offerings to help clients manage working capital more effectively.

RCBC head of trade and supply chain finance Alexei Jabola emphasized that businesses must align their financing solutions with their specific liquidity requirements and position within the supply chain. He identified payables and receivables finance as key tools for managing working capital amid disruptions such as volatile exchange rates and high energy costs. These solutions are intended to provide a buffer for firms as they navigate the transition toward normalized shipping routes and shifting global trade dynamics.

To further support corporate clients, RCBC plans to introduce digital trade and supply chain finance capabilities on its corporate online banking platform by 2026. This upcoming digital suite will enable businesses to initiate and manage transactions including letters of credit, bank guarantees, and Bureau of Customs PAS6 payments entirely online. The bank's move toward digital SCF services reflects a broader industry trend toward providing real-time visibility and management of trade-related financial obligations.

On the risk management front, Maria Pamela C. Macapagal, RCBC’s head of corporate and commercial distribution, advised companies to focus on hedging strategies rather than attempting to forecast currency movements. She suggested that firms define their worst-case rates and implement strategies to lock in costs and protect margins, noting that history shows the difficulty of predicting where the peso-dollar rate will settle. This approach is framed as a necessary defense against the margin compression expected across various industries.

The urgency of these financial strategies is underscored by a sobering economic outlook from RCBC chief economist Michael L. Ricafort, who projected that inflation could stay between 6 and 7 percent through 2026 if oil prices remain high. Ricafort also estimated that GDP growth could slow to 3–4 percent, while the central bank's policy rate could rise to 6 percent by the end of the year. These factors, combined with a slowing US economy, are expected to force businesses to adjust their expansion plans and prioritize cost-efficiency in their supply chain operations.