THE TRUST ARM of Rizal Commercial Banking Corp. (RCBC) expects its assets under management (AUM) to surpass P200 billion this year.
“We’re moving towards P200 billion. So, I guess we are on track to achieve that…Profitability targets are also important, but bottom line, we do see ourselves reaching and exceeding the P200-billion mark for this year,” RCBC Trust Corp. President and Chief Executive Officer Robert B. Ramos told BusinessWorld on the sidelines of an event last month.
The stand-alone trust company’s AUMs rose by 14% year on year to P186.06 billion as of end-March. However, this was down from the P194.77 billion booked at end-2024.
Mr. Ramos said that RCBC Trust’s clients are looking at investing locally, specifically in government securities with tenors ranging from two to seven years to lock in still-high yields amid expectations that borrowing costs will ease further.
“That’s what a lot of clients are doing — taking advantage of the higher interest rates and maximizing them with the short-term viewpoint that interest rates are on the way down.”
He added that about 70% to 80% of their assets are fixed-income instruments. “When rates are on the way down, prices appreciate. So, it is an opportunity for clients to capitalize, make some gains… What we’ve done so far is, for at least our discretionary funds, what we advise certain clients is take advantage of the rates as they are now. Increase your duration and then see your bonds appreciate. That’s what we’ve been telling our clients and that’s what we continue to do.”
Last month, the Bangko Sentral ng Pilipinas (BSP) lowered borrowing costs by 25 basis points (bp) for a third straight meeting, bringing the target reverse repurchase rate to 5%. It has now slashed benchmark rates by a cumulative 150 bps since the start of its easing cycle in August 2024.
BSP Governor Eli M. Remolona, Jr. has said that the policy rate is now at a “sweet spot” in terms of both inflation and output, but left the door open to one last cut this year to support growth if needed, which would likely mark the end of its current easing cycle.
The Monetary Board will next meet on Oct. 9 to review their policy settings.
Investors also remain interested in putting their funds in offshore funds despite the market volatility stemming from the United States’ shifting trade policies, which have resulted in global growth concerns, Mr. Ramos added.
“Our clients have always been of the mindset that they’ve been able to access certain global funds. So, pretty much, there hasn’t been a big change. There are clients who still invest in US markets, there are clients who prefer investing in European and even Asian markets,” he said.
“For some clients, they’ve either stood back, or when the US markets corrected for a bit, some clients actually increased their exposure. Mostly, I would say that clients have stayed level.”
The company’s goal is to provide their clients with investment options that suit their risk appetite, he said.
“We want to make sure that, number one, we provide investment solutions for them — the investment solutions that they need, the investment solutions that they want, and products that are comparable to their risk palates. For those discretionary funds that we manage, we want to make sure that we manage them to the parameters that they provide us. We have to give them returns that satisfy them, given the market conditions,” Mr. Ramos said.
“As long as it meets the client’s risk parameters and investment needs, we’re always looking at making available certain investment outlets, whether they are fixed-income or equity or exchange-traded funds or mutual funds, as long as the client meets the standards.” — Aaron Michael C. Sy
