In a press statement on Thursday, Mar. 6, 2025, AUB senior vice president and head of trust Andrew Chua noted that the US Federal Reserve’s hawkish monetary policy will keep rates elevated, making dollar-denominated investments more attractive.
This outlook follows the US government's 25-percent tariffs on Canadian and Mexican imports and a 10-percent tax on Canadian energy, which have prompted retaliatory measures from both countries.
“With what looks like the start of a trade war, inflationary pressures are expected on the global front,” Chua said. “Overall, we expect volatility to remain elevated as continued uncertainty persists in both the global economic as well as geopolitical front.”
Given this landscape, AUB is highlighting investment opportunities in high-yielding US dollar assets, such as its Global Dollar Fund (GDF), and stable peso-denominated options like the AUB Peso Investment Fund (PIF).
Both funds were recognized among the country’s 20 best-managed funds by the CFA Society Philippines, with GDF receiving its ninth award in the Dollar Medium-Term Bond Fund category and PIF earning its second recognition in the Peso Medium-Term Bond Fund category.
“From an investment perspective, our peso and dollar bond funds will continue to be opportunistic in terms of deploying funds, taking positions on the belly of the curve with a duration of three to five years,” Chua said. “We believe this space will give us the best returns in terms of accruals with the least volatility.”
Despite concerns over the tariff wars, Chua emphasized that the Philippines is likely to be less affected than other Southeast Asian countries due to its current trade profile.
He added that the Bangko Sentral ng Pilipinas may still have room to cut local interest rates due to the peso’s recent strengthening, which could provide further economic support.
