Metrobank just recently offered a new investment solution for aggressive investors.
It’s called the dual currency investment, or DCI. Through Metrobank’s guidance and advice, a high-net-worth individual (HNWI) client made the right call and profited from the deal in a span of just two weeks.
The product is already a staple alternative investment in offshore banks. Having received the approval to offer DCI to its clients just recently, Metrobank marks this as a groundbreaking deal for this innovative product.
The Dual Currency Investment (DCI) is a short-term yield enhancing investment, designed for clients who want to earn potentially higher returns than traditional instruments such as time deposits.
First, some terms to define – investment currency, alternate currency, and strike rate.
Investment currency is the currency you invest in initially. The alternate currency is the currency that you might receive upon maturity of the investment. And the strike rate is the target exchange rate that you set for the deal.
For example, let’s use the US dollar (USD) as the investment currency and Philippine peso (PHP) as the alternate currency. If at the maturity of the investment, the USD/PHP exchange rate manages to stay below the strike rate that you set, then you receive both your payout and principal in the investment currency. You win.
However, if the USD/PHP exchange rate increases beyond the strike rate, then you still receive the payout in the investment currency, but the principal will be converted to the alternate currency at the strike rate. Because the prevailing exchange rate is higher than the strike rate that you converted at, your investment now is worth less in peso terms.
Let’s go into the details of the bank’s very first DCI deal.
It all started with Edgar (not his real name), one of our HNWI clients in the countryside. Edgar is in the business of processing and exporting vegetable oil, coconut oil, and other agricultural by-products.
This provides Edgar with a natural source of foreign currency cash flow, particularly US dollars (USD). However, this also means that he needs to regularly convert his dollar revenues into Philippine pesos (PHP) to settle various operating expenses such as employee salaries, utilities, taxes, and more.
Our Private Wealth and Investment Distribution teams put two and two together – Edgar clearly has dollars in excess investible funds, and he doesn’t mind receiving pesos in the future. This made him a suitable candidate for the very first DCI deal.
On May 26, 2026, Edgar invested USD 1,000,000 in a two-week DCI to expire on June 8, 2026. The product gives him a net effective return of 10.986% per annum, which, as of this writing, is unattainable in other traditional investments for the same tenor.
However, there’s a catch – at the time of dealing, the prevailing USD/PHP exchange rate was 61.55 and Edgar agreed to set a strike rate that is 30 centavos higher at 61.85.
What is the significance of this strike rate? Under the terms and conditions of this specific DCI, if the USD/PHP exchange rate on expiry date is greater than 61.85, then Edgar is obligated to convert the entire USD 1,000,000 into pesos at the rate of 61.85.
He will still receive a dollar payout of 10.986% per annum, but will be left holding PHP 61,850,000 instead of his original principal.
On the other hand, if the USD/PHP exchange rate on expiry date remains below the strike rate of 61.85, then Edgar will receive the dollar payout and his original principal of USD 1,000,000.
Setting the strike rate at 61.85 was a strategic decision. Prior to entering into this DCI, the USD/PHP exchange rate remained capped at 61.75 and Edgar was confident that the spot rate would continue to respect that ceiling over the next two weeks. However, should his view not pan out, he was willing to accept the risk of receiving pesos in return.
On June 8, 2026, the USD/PHP exchange rate used as reference for the DCI expiry came out at 61.652. Edgar was completely right on his USD/PHP view. The local pair continued to respect the key resistance of 61.75 all throughout the two-week period.
With the DCI expiring unexercised, Edgar received his USD 1,000,000 back along with a handsome 10.986% per annum payout. He may even consider dealing another DCI, this time with a completely new set of indicative returns.
Edgar’s profile matched the following criteria that made him a suitable client for dealing DCI.
He identified existing or anticipated payment obligations in another currency (e.g. PHP) and sought to generate enhanced returns on idle funds (e.g. USD) while maintaining the flexibility to receive the investment proceeds in that currency.
He sought to enhance returns on surplus funds compared to traditional deposit products and understood that the enhanced return is achieved by assuming foreign exchange risk.
He holds a market view on the exchange rate between the investment currency and the alternate currency and wished to express his market view through the DCI.
And lastly, he is willing to accept settlement of the DCI in the alternate currency at the pre-determined strike rate.
Do you think you meet the criteria above?
Beyond the USD/PHP, DCI is also available for other currency pairs such as EUR/USD, USD/JPY, AUD/USD, and many more. The minimum investment amount is USD 100,000 or its equivalent in other currencies.
The terms and conditions for conversion at the strike rate differ depending on the client’s investment currency. Like in Edgar’s example, it could be the moment an exchange rate moves above the strike rate. In other cases, moving below the strike rate may also trigger the conversion to the alternate currency.
But the risks involved remain the same, regardless of currency pair or expiry conditions. DCI is not a principal-protected investment. This product is not a deposit instrument, and it is not insured by the Philippine Depository Insurance Corporation.
Investors are exposed to currency conversion risk. Losses may also be incurred by the investor if the DCI is terminated prior to maturity date. Cost of early termination may be substantial and is affected by several market factors such as, but not limited to, the FX rate, interest rates, and volatility of the relevant currency pair.
For these reasons, only aggressive and sophisticated investor clients may enter into DCI.
For more information on this product and other unique investment solutions offered by Metrobank, please reach out to your Wealth Specialist.
EARL ANDREW “EA” AGUIRRE is the Head of the Investment Counselor Department under the Financial Markets Sector of Metrobank. He has more than a decade of experience in foreign exchange, fixed income securities, and derivatives sales. He has a Master’s in Business Administration from the Ateneo Graduate School of Business. His interests include regularly traveling to Japan and learning its language and culture.
