Market & Mainstreet
BSP Weighs a Rate Hike Against Slowing Growth, Peso Pressure Builds on Widening BOP Gap, and Bessent Unveils “Toughest Sanctions in History” on Iran
The Daily Scan – August 24, 2026 (Mon)
Monday opens with the BSP boxed in ahead of Thursday’s rate decision, torn between stubborn inflation and an economy that grew just 2.3 percent last quarter, its weakest pace in years. GlobalSource Partners is now flagging the direction of the balance of payments and reserves as worth closer monitoring, even if it’s not yet a full-blown crisis. Overseas, Treasury Secretary Scott Bessent unveils the details of promised “toughest sanctions in history” on Iran today, an announcement that could decide whether oil, and Philippine fuel costs, extend their climb or start to ease, right as Nvidia’s earnings and the Fed’s preferred inflation gauge land in the same five-day stretch.
| BSP Next Meeting | Q2 2026 GDP Growth | Brent Crude |
| Aug. 27, policy rate 4.75% | 2.3%, weakest in years | ~$92-93/barrel |
SECTION 1 · Philippines
● Economists split on another BSP rate hike as second-quarter growth slows to 2.3 percent
WHAT HAPPENED
Six of nine economists polled by The Manila Times expect the BSP’s Monetary Board to raise its benchmark rate by another 25 basis points to 5.0 percent when it meets Thursday, Aug. 27, even as Governor Eli Remolona Jr. has flagged that second-quarter GDP growth of just 2.3 percent, well under the government’s downwardly revised 3.5 to 4.5 percent full-year goal, could argue for a less aggressive approach. Security Bank’s Angelo Taningco said a hike would still be consistent with a less aggressive tightening stance overall, while HSBC’s Aris Dacanay said raising rates further could build a buffer for inflation and FX risk amid dwindling reserves.
UNCERTAIN
Union Bank’s Ruben Carlo Asuncion said the BSP will be weighing inflation expectations, oil prices, exchange rate movements, food supply risk, and the extent of the growth slowdown all at once, so which factor tips the committee’s decision either way isn’t settled ahead of Thursday.
WHY IT MATTERS
A higher policy rate raises borrowing costs across the board just as growth is already the weakest in years, a tightening squeeze for any business carrying variable-rate debt, and it lands the same week global oil markets face their own inflection point covered in Section 2.
RISK
Businesses with variable-rate financing should model a 25 basis point hike into their near-term cost of capital now, rather than waiting for Thursday’s outcome to react.
NEXT MOVE
Watch for any pre-meeting signal from Governor Remolona in the days ahead, and track Thursday’s Monetary Board decision itself as the next concrete data point.
● Widening balance of payments deficit and dwindling reserves add fresh pressure on the peso
WHAT HAPPENED
GlobalSource Partners country analyst Diwa Guinigundo said the Philippines isn’t yet facing an external payments crisis, with its reserve buffer still substantial, but persistent balance of payments deficits and further declines in gross international reserves could increase the economy’s vulnerability to external shocks and add more pressure on the peso.
UNCERTAIN
Guinigundo said the direction of the BOP and reserves warrants closer monitoring but stopped short of naming a specific threshold where the trend becomes a market-moving concern rather than a watch-list item.
WHY IT MATTERS
A weaker peso raises the cost of anything sourced abroad, from raw materials to equipment to fuel, and a shrinking reserve buffer limits how much room the BSP has to defend the currency if pressure builds further, a dynamic that compounds directly with Thursday’s rate decision above.
RISK
Import-dependent SMEs should treat continued peso softness as the working assumption for the rest of the year, not a temporary condition likely to reverse soon.
OPPORTUNITY
Exporters and dollar-earning businesses, including BPO-adjacent services, get a natural hedge as the peso softens further.
NEXT MOVE
If your supply chain runs on imported inputs, revisit forex hedging or supplier contract terms this week rather than after a bigger move.
● Economy needs a 3.7 percent average growth sprint over the rest of 2026 to hit government’s target
WHAT HAPPENED
BusinessWorld reports economists say the Philippine economy needs to grow by at least 3.7 percent on average across the remaining three quarters of 2026 to meet the government’s already-revised growth target, after first-half GDP growth averaged just 2.6 percent.
UNCERTAIN
Which sectors are expected to carry that second-half acceleration, and whether government infrastructure spending plans actually support it, isn’t detailed in available reporting.
WHY IT MATTERS
A 3.7 percent second-half average is a meaningfully higher bar than the economy has managed all year, and a second consecutive miss would reinforce the same slowdown story already shaping the BSP’s rate decision and the peso’s recent weakness.
RISK
Businesses should stress-test 2026 revenue forecasts against a scenario where full-year growth lands below the government’s target, not exactly at it.
NEXT MOVE
Watch third-quarter GDP data due in the coming months for the first real read on whether the second-half acceleration is materializing.
● PSE pipeline points to P204 billion in 2026 capital raising despite the growth slowdown
WHAT HAPPENED
The Philippine Stock Exchange expects listed and prospective companies to raise about P204 billion through the capital market in 2026, based on applications received so far, according to BusinessWorld’s top-stories tracking.
UNCERTAIN
How much of that P204 billion is new equity issuance versus bond offerings, and how the figure compares against prior years, isn’t broken out in available reporting.
WHY IT MATTERS
A still-active capital-raising pipeline, even with rates elevated and growth soft, signals companies continue to see the local market as a viable funding channel, a read on investor appetite that trickles down into broader SME financing conditions.
OPPORTUNITY
Founders eyeing an eventual listing or structured financing route get more comparables and liquidity data to work with as the pipeline stays active.
NEXT MOVE
Track which sectors are actually closing deals this year, not just filing intent, if a future listing or issuance is on your roadmap.
SECTION 2 · Worth Knowing
● Bessent set to unveil “toughest sanctions in history” on Iran at today’s press conference
WHAT HAPPENED
US Treasury Secretary Scott Bessent holds a press conference today, Aug. 24, to detail a new sanctions package against Iran he has called the greatest campaign of coordinated economic isolation ever assembled, aimed at cutting off funding for Iran’s military proxies and pressuring any country, including China, that continues trading with Tehran. Bessent wrote in a Financial Times opinion piece Sunday that the package amounts to “an economic D-Day,” and has separately told CNBC the goal is to collapse the Iranian regime through unprecedented financial measures.
UNCERTAIN
China buys the large majority of Iran’s shipped oil and its embassy has already said sanctions and pressure do not help resolve the issue, so whether Beijing complies or absorbs secondary sanctions instead is unresolved, and that choice will shape how oil markets react in the days ahead.
WHY IT MATTERS
Oil shipments through the Strait of Hormuz have been severely disrupted for months, and today’s announcement is the next concrete catalyst markets will use to price crude, which flows directly into Philippine fuel costs and feeds the same inflation risk shaping the BSP’s Thursday decision.
RISK
Harsher sanctions with limited compliance from major buyers like China could extend the Hormuz disruption and keep fuel costs elevated locally through the rest of the year.
OPPORTUNITY
Any sign of de-escalation or a negotiated reopening would be an immediate tailwind for import-heavy Philippine businesses and transport costs.
NEXT MOVE
Watch today’s press conference specifically for language on China compliance, the detail most likely to move oil prices, not the sanctions announcement itself.
● Wall Street heads into a five-day stretch with Nvidia earnings, Jackson Hole, and July PCE
WHAT HAPPENED
The week of Aug. 24-29 packs Nvidia’s fiscal Q2 2027 earnings on Wednesday, the Fed’s Jackson Hole Economic Symposium, and Friday’s July PCE inflation report, the Fed’s preferred inflation gauge, alongside a keynote from new Fed Chair Kevin Warsh, all against a backdrop of 30-year Treasury yields sitting near multi-decade highs after a 1.4 percent weekly loss on the S&P 500.
UNCERTAIN
Warsh has stayed tight-lipped since his July meeting and declined to give forward guidance, so how he frames the inflation-versus-bond-market tension at Jackson Hole is the single biggest wildcard of the week.
WHY IT MATTERS
US rate direction and bond market stability set the tone for global capital flows and dollar strength, both of which affect how expensive it is for Philippine businesses and the government to borrow, and how far the peso stretches against the import costs covered in Section 1.
RISK
A hawkish Warsh keynote or a soft Nvidia print could reignite the bond market turbulence that’s already pressured global equities this month.
NEXT MOVE
If you hold dollar-denominated assets or debt, have a plan for both a risk-on and risk-off outcome heading into Wednesday and Friday.
● Asia’s oil-import economies stay exposed as Hormuz flows remain near a standstill, IEA says
WHAT HAPPENED
The IEA’s August report shows oil flows through the Strait of Hormuz remain severely constrained months into the disruption, with regional exports down sharply and global oil supply forecast to fall by 4.3 million barrels a day in 2026 as losses in the Middle East and Russia outweigh gains from the Americas.
UNCERTAIN
The IEA doesn’t expect Middle East output to return to pre-conflict levels until early 2027, but that timeline assumes no further escalation, a significant assumption given today’s sanctions announcement covered above.
WHY IT MATTERS
The Philippines imports roughly 98 percent of its crude from the Middle East, making it one of the more exposed economies in Asia to a prolonged Hormuz disruption, a dynamic already visible in this year’s inflation prints and energy-emergency declarations.
RISK
Fuel-dependent businesses should treat elevated oil prices as the baseline for the rest of 2026 planning, not a spike to wait out.
OPPORTUNITY
Businesses that diversified fuel sourcing or shifted toward energy efficiency earlier in the crisis are now better insulated than competitors who didn’t.
NEXT MOVE
If fuel is a meaningful line item in your cost structure, build elevated prices into your planning baseline rather than assuming near-term relief.
SECTION 3 · THE OPPORTUNITY BEHIND THE NEWS
Two Prices Being Set Far From Manila Are About to Move at Once
Put the BSP’s rate dilemma next to today’s Bessent sanctions announcement and you get the real shape of the next few months. Local borrowing costs and imported fuel costs, the two levers that decide how expensive it is to run a business here, are both being set by decisions happening far from Manila, and both are landing at the same time growth is already the softest it’s been in years.
The founders who come out ahead won’t be the ones waiting for clarity, because clarity isn’t coming this week. They’ll be the ones locking in what they can control now: fixed financing terms before Thursday’s rate call, supplier and forex arrangements before the peso moves further, and fuel cost assumptions that don’t depend on Hormuz reopening on any particular timeline. Uncertainty this layered rewards decisiveness on the pieces you can actually decide.
SECTION 4 · FOUNDER’S LESSON
“Not a Crisis Yet” Is the Line Worth Sitting With
Guinigundo’s read on the peso is worth sitting with: the Philippines isn’t in a crisis, but the direction of the numbers warrants closer monitoring. That’s not a headline built for alarm, and that’s exactly why it’s easy to miss.
Most business damage doesn’t come from the crisis everyone sees coming. It comes from the trend nobody was watching closely enough, month after month, until the gap that seemed manageable stopped being manageable. The businesses that handle a slow-moving squeeze well are usually the ones that built in a buffer while the story was still boring, not the ones scrambling once it became urgent enough to make the front page.
SECTION 5 · ONE REAL SIGNAL
Today’s Press Conference Is the Most Concrete Catalyst Fuel Prices Have Had in Months
Today’s press conference is the top story of this edition since it’s the single most concrete, near-term catalyst for the number that touches nearly every Philippine business: the price of fuel. Everything else this week, from the BSP’s rate decision to Nvidia’s earnings, matters, but oil is the variable with the most direct line into daily operating costs for SMEs.
What makes this different from months of prior sanctions rhetoric is the specificity Bessent has promised: not another warning, but the actual mechanics of enforcement, including whether China faces direct consequences for continuing to buy the large majority of Iran’s oil exports. China’s response, or lack of one, is the detail to watch, because it determines whether the Strait of Hormuz disruption that’s already pushed Brent crude past $92 a barrel extends further or starts to ease.
For Philippine founders, this isn’t a story to read and move past. It’s the reason to treat elevated fuel and import costs as the working assumption for the rest of 2026, not a temporary condition to wait out. The businesses already planning around that assumption will be in a stronger position than those still hoping for a quick resolution.
Summarized in our own words with links to every source. We don’t reproduce full articles or bypass paywalls. Interpretation is labeled as such and kept separate from reported fact.
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