Businesses should continue to manage trade and foreign exchange risks despite easing oil prices and improving global shipping conditions, as the financial impact of months of geopolitical disruptions is expected to persist, according to Rizal Commercial Banking Corp. (RCBC).
Relief tempered by lingering volatility
RCBC noted that Philippine companies may see some relief after oil prices declined and global markets rebounded following a June 18, 2026, framework agreement to end regional hostilities. The agreement includes reopening the Strait of Hormuz to commercial shipping and lifting the naval blockade on regional ports. However, the bank cautioned that businesses should continue managing cash flow and financial risks as market volatility remains.
Speaking at RCBC’s economic briefings in Cebu and Bacolod, RCBC head of Trade and Supply Chain Finance Alexei Jabola said businesses should adopt financing solutions that match their position in the supply chain and liquidity requirements. He explained that trade finance instruments such as payables finance and receivables finance can help companies cope with currency fluctuations, higher energy costs, and supply chain disruptions caused by geopolitical tensions.
Supply chain finance as a resilience tool
Jabola added that supply chain finance allows businesses to unlock working capital tied up in traditional payment cycles, ease financial bottlenecks, and strengthen relationships with suppliers, improving resilience during periods of uncertainty. RCBC also announced that its corporate online banking platform will roll out expanded digital trade finance capabilities this year, enabling clients to initiate and manage transactions such as letters of credit, bank guarantees, Bureau of Customs PAS6 payments, and supply chain finance services online.
For companies exposed to foreign exchange movements, RCBC head of Corporate and Commercial Distribution Maria Pamela C. Macapagal urged businesses to adopt structured risk management instead of attempting to predict currency movements. She said exchange rate forecasts should only serve as a guide, noting that businesses should identify their foreign exchange exposure, determine acceptable risk levels, and implement hedging strategies to protect profit margins and stabilize costs.
Inflation and growth outlook
During the forum, RCBC chief economist Michael L. Ricafort said the bank’s baseline scenario projects inflation to average six to seven percent in 2026, above the Bangko Sentral ng Pilipinas’ (BSP) forecast of 6.4 percent, assuming elevated oil prices and prolonged geopolitical tensions. He also projected Philippine economic growth to slow to around three to four percent, below the government’s five- to six-percent target, while the BSP’s policy rate could rise to between 5.5 percent and six percent by yearend from the current 4.75 percent.
Ricafort said inflation may take another one to one-and-a-half years to return to the BSP’s two- to four-percent target, underscoring the need to accelerate investments in renewable energy to reduce the country’s dependence on imported fuel. He added that slowing global growth, particularly in the United States, could squeeze corporate margins worldwide and prompt businesses to scale back investment and expansion plans.
Headline inflation reached a three-year high of 7.2 percent in April before easing to 6.8 percent in May, remaining well above the government’s target range and prompting the BSP to maintain a tight monetary policy stance amid persistent risks from global commodity prices.
