Market & Mainstreet
PH Wins Back-to-Back Credit Rating Affirmations, Cebu Pacific’s Fuel Bill Doubles on a Weaker Peso, and Nvidia Falls for a Seventh Straight Day Into Its Own Guidance
The Daily Scan – August 25, 2026 (Tue)
Tuesday brings a genuinely encouraging data point buried among the usual pressure: the Philippines picked up back-to-back credit rating affirmations from Moody’s and R&I within days of each other, both agencies calling the second-half’s growth contraction largely cyclical rather than structural. That optimism sits awkwardly next to Cebu Pacific’s latest numbers, where a weaker peso and elevated fuel costs combined to produce the airline’s toughest quarter since the pandemic. Overseas, Nvidia’s seven-day losing streak has dragged the entire semiconductor sector into a bear market just as Wednesday’s earnings report arrives to either confirm or reverse the slide.
| BSP Next Meeting | Philippine Semi Index | Nvidia (Aug 24) |
| Aug. 27, policy rate 4.75% | -22.8% from 52-wk high | $208.48, 7th straight decline |
SECTION 1 · Philippines
● Philippines earns back-to-back credit rating affirmations from Moody’s and R&I within days
WHAT HAPPENED
Moody’s affirmed the Philippines’ Baa2 investment-grade rating with a stable outlook on Monday, three days after Rating and Investment Information, Inc. affirmed the country’s A- rating on Aug. 21, with Executive Secretary Ralph Recto calling it a double vote of confidence in the economy and in the Marcos administration’s governance. Moody’s said the current growth contraction, including the effects of higher energy prices from the Middle East conflict, is largely cyclical, and expects recovery from the second half of 2026 led by a rebound in public investment as the government resumes stalled disbursements.
UNCERTAIN
Both agencies frame the slowdown as temporary and cyclical rather than structural, but that read depends heavily on the government actually normalizing spending execution in the second half, something that hasn’t happened yet given the disbursement delays both agencies referenced.
WHY IT MATTERS
A stable rating from two major agencies, even amid a genuine slowdown, keeps the Philippines’ borrowing costs from rating-driven spikes and signals international investors still see the underlying economy as sound, a meaningfully different read than what the day-to-day peso and growth headlines suggest.
OPPORTUNITY
A reaffirmed investment-grade rating supports the case for continued foreign direct investment interest, which businesses positioning for partnerships or capital raises can point to as a credibility signal.
NEXT MOVE
Watch whether public investment disbursements actually accelerate in the second half, the specific condition Moody’s flagged as the basis for its recovery call.
● Cebu Pacific’s fuel expense more than doubles as weaker peso amplifies dollar-priced costs
WHAT HAPPENED
Cebu Pacific CEO Mike Szucs said the second quarter was the most challenging operating environment the airline has faced post-pandemic, as fuel expense more than doubled from a year earlier, with the impact magnified by an 8 percent weakening of the peso against the dollar, since fuel and aircraft leasing costs are typically priced in US currency. The airline has hedged about 30 percent of its third-quarter fuel needs at below $120 per barrel to secure near-term protection, part of a wider squeeze across Southeast Asia’s budget carriers, with AirAsia posting a net loss and Scoot’s operating loss nearly doubling.
UNCERTAIN
Aviation analyst Brendan Sobie called the short-term outlook “rather bleak” while noting hope for fourth-quarter improvement is too early to gauge, and whether household budgets recover enough to support the peak travel season remains an open question given how strained consumer spending already is.
WHY IT MATTERS
Budget carriers are a real-time read on both fuel costs and peso weakness compounding at once, since their dollar-denominated expenses convert at a worse exchange rate exactly when fuel itself costs more, a dynamic that applies to any Philippine business with meaningful dollar-priced input costs, not just airlines.
RISK
Businesses with unhedged dollar-denominated costs should treat Cebu Pacific’s result as a preview: a weaker peso doesn’t just raise import costs, it can double the peso-denominated impact of costs already elevated for other reasons.
OPPORTUNITY
Cebu Pacific’s 30 percent fuel hedge at sub-$120 pricing shows a concrete, partial hedging approach other fuel-exposed businesses could adapt at smaller scale.
NEXT MOVE
Watch fourth-quarter capacity and fare decisions from Philippine carriers as an early signal of whether household travel demand is genuinely recovering or still constrained.
● Millions of Filipinos who crossed the poverty line remain one shock from falling back, analyst warns
WHAT HAPPENED
GlobalSource Partners Philippine analyst Diwa Guinigundo said many of the households that recently crossed the poverty threshold, which fell to a record-low 9.7 percent in 2025 from 15.5 percent, remain only one significant shock away from falling back, since moving above the poverty line is not the same as escaping poverty vulnerability. The World Bank separately estimates around 28 percent of Filipinos live just above the line, exposed to elevated food and energy prices that continue eroding purchasing power.
UNCERTAIN
Guinigundo’s warning doesn’t quantify how large a shock, whether from inflation, a rate hike, or an oil price spike, would be needed to push a meaningful share of that 28 percent back below the line.
WHY IT MATTERS
This connects directly to Thursday’s rate decision and the peso’s recent weakness above: a household near the poverty line has essentially no buffer against the kind of cost-of-living increase that higher rates and a softer peso can produce.
RISK
Consumer-facing SMEs should expect continued fragility in discretionary spending from the near-poverty-line segment, not a steady recovery, given how thin that buffer is.
NEXT MOVE
Watch the PSA’s next inflation print alongside Thursday’s BSP decision as the two clearest signals of whether pressure on this vulnerable segment is easing or building.
● SEC reviews raising stockbrokers’ minimum capital requirement to P100 million
WHAT HAPPENED
The Securities and Exchange Commission is reviewing a proposal to raise stockbrokers’ minimum capital requirement, a move SEC Chairman Francis Lim said the commission must approve before the Philippine Stock Exchange can put a similar rule into place, with the review partly prompted by previous incidents involving brokers with relatively small capital bases.
UNCERTAIN
Lim stressed that lower capitalization did not necessarily indicate misconduct, so the exact threshold the SEC settles on, and the timeline for implementation, remain undecided.
WHY IT MATTERS
A higher capital bar would likely consolidate the local brokerage industry toward larger, better-capitalized firms, which could improve market stability but also reduce the number of smaller brokers serving niche or regional clients.
OPPORTUNITY
Better-capitalized brokerages generally mean stronger counterparty confidence for SMEs and investors using the local market, a small but real improvement to market infrastructure if the rule change goes through.
NEXT MOVE
Watch for the SEC’s formal proposal and comment period, expected to follow this review stage, for the actual proposed capital figure and implementation timeline.
SECTION 2 · Worth Knowing
● Nvidia falls for a seventh straight session, its longest losing streak since 2022, as chip sector enters a bear market
WHAT HAPPENED
Nvidia fell 2.3 to 2.9 percent Monday to close around $208 to $210, its seventh consecutive daily decline and the longest such streak since September 2022, dragging the Philadelphia Semiconductor Index down 3.6 percent to a level 22.8 percent below its 52-week high, a formal bear market for the chip sector even as the Dow rose 0.28 percent the same day. Memory and storage names were hit hardest, with SanDisk down 8.7 percent and Micron down 6.7 percent, a pattern distinct from a broad de-risking narrative given reports that Nvidia’s largest customers have been told server prices built around its chips are rising more than 15 percent on systems shipping early next year.
UNCERTAIN
Nvidia had already guided to $91 billion in revenue for the quarter reporting Wednesday, so analysts note the number that actually matters is gross margin, not revenue, and whether the market’s pre-earnings selloff reflects genuine doubt about the quarter or simple profit-taking after a long AI-driven run isn’t resolved yet.
WHY IT MATTERS
A bear market in the sector that has driven most of this year’s AI capital expenditure narrative, arriving two days before the actual earnings print, raises the stakes on Wednesday’s result well beyond Nvidia itself, since a soft print could extend pressure across the semiconductor supply chain that touches Philippine BPO and tech-adjacent services demand.
RISK
A weak Wednesday print, on top of an already-bearish seven-day setup, could trigger a sharper global tech selloff than a standalone earnings miss normally would.
OPPORTUNITY
Options markets are pricing in a roughly 6 percent move either way, and a strong beat-and-raise quarter could reverse the entire seven-day slide quickly given how oversold the sector already looks.
NEXT MOVE
Watch Wednesday’s gross margin figure and any commentary on Vera Rubin shipment timing specifically, the two details analysts flagged as more consequential than the headline revenue number.
● Oil falls 2.5 percent even as US unveils toughest-ever Iran sanctions with no China exemption
WHAT HAPPENED
Brent crude lost 2.5 percent to $92.06 a barrel Monday even after the Trump administration rolled out “Operation Economic Outcast,” a sweeping sanctions campaign against Iran that Treasury Secretary Scott Bessent called an “economic D-Day,” with the US explicitly declining to exempt China. Commonwealth Bank of Australia said it expects Brent to keep trading in a $70 to $100 range through the rest of 2026, with prices able to fall toward the bottom of that band if Strait of Hormuz flows recover even to 50 to 60 percent of pre-war levels.
UNCERTAIN
China’s Foreign Ministry said the sanctions do not “fit the interest of any party” but stopped short of announcing retaliation or a compliance decision, so whether Beijing actually reduces Iranian oil purchases remains the open question that will determine if oil prices stay lower or reverse.
WHY IT MATTERS
A calmer-than-feared market reaction directly benefits the fuel-cost pressure showing up in Cebu Pacific’s results above, so if Monday’s lower prices hold, Philippine businesses carrying elevated fuel costs get a rare bit of near-term relief.
OPPORTUNITY
If oil stabilizes lower, fuel-exposed businesses like airlines and logistics operators may find this a better window to lock in near-term hedges than the higher prices seen earlier this year.
NEXT MOVE
Watch China’s actual crude purchasing behavior over the coming days as the real test of whether the sanctions campaign has teeth or whether Monday’s calm holds.
● Treasury’s debt buyback move offers only brief bond market relief as Nvidia risk dominates
WHAT HAPPENED
Treasury yields moved lower Monday after CNBC reported the department may use its General Account to fund a buyback operation for long-dated debt, but the relief proved short-lived as Nvidia’s slide and broader chip-sector weakness dominated market attention instead, with the S&P 500 slipping slightly despite the friendlier yield backdrop.
UNCERTAIN
A Wilmington Trust bond portfolio manager described the Fed and Treasury as working in opposite directions, with Fed Chair Kevin Warsh reportedly welcoming higher yields to tighten policy without raising rates while Treasury’s buyback aims to lower yields, a tension whose resolution likely falls to Warsh’s Jackson Hole keynote later this week.
WHY IT MATTERS
Policy institutions pulling in different directions on the same variable, bond yields, adds a layer of unpredictability to US rate direction that compounds with Thursday’s BSP decision, since both central banks’ signals affect how the peso trades against the dollar this week.
RISK
Conflicting signals between the Fed and Treasury increase the odds of a surprise move in either direction around Friday’s Jackson Hole keynote, a risk worth building into any near-term dollar-exposure planning.
NEXT MOVE
Watch for any further Treasury buyback details this week, and track how yields respond heading into Warsh’s Friday keynote.
SECTION 3 · THE OPPORTUNITY BEHIND THE NEWS
Two Ratings Agencies See a Cyclical Dip Where the Daily Headlines See a Crisis
It’s worth sitting with the gap between Monday’s two Philippines stories. Moody’s and R&I both looked at the same slowdown that’s driving the BSP’s rate deliberations and the peso’s recent weakness, and both concluded the contraction is largely cyclical, not structural, with recovery expected once public investment disbursements normalize. That’s a meaningfully different read than the day-to-day headlines about a weak peso and elevated fuel costs would suggest on their own.
The practical takeaway for founders isn’t to ignore the near-term pressure, Cebu Pacific’s doubled fuel bill is real and immediate. It’s to hold both timeframes at once: the credit agencies are underwriting a bet that this is a rough patch within a sound underlying economy, not evidence the fundamentals have shifted. Businesses making multi-year decisions, financing terms, expansion plans, hiring commitments, have real reason to weigh the agencies’ longer view alongside the sharper near-term costs everyone is feeling right now.
SECTION 4 · FOUNDER’S LESSON
“Most Challenging Since the Pandemic” Is a Specific Claim Worth Taking Seriously
Cebu Pacific’s CEO didn’t say the quarter was difficult. He said it was the most challenging operating environment the airline has faced since the pandemic, a specific, comparative claim from someone with years of data to compare against. That kind of language, precise rather than vague, is worth paying closer attention to than routine caution, because executives who’ve weathered real crises don’t reach for pandemic comparisons casually.
The lesson generalizes past aviation. When someone with genuine comparative experience describes a current situation using their most extreme prior benchmark, that’s a signal worth taking at face value rather than discounting as typical corporate hedging. Founders should extend the same discipline to their own language: reserve your most serious comparisons for when they’re actually true, so that when you do reach for one, your team and partners know to listen closely.
SECTION 5 · ONE REAL SIGNAL
A Bear Market in Chips, Two Days Before the Earnings That’s Supposed to Justify the Whole Sector
This edition’s top global story isn’t Nvidia’s earnings, which haven’t happened yet. It’s that the semiconductor sector entered a bear market before those earnings landed, a genuinely unusual sequence. Normally a sector waits for bad news to sell off. Here, the Philadelphia Semiconductor Index is already 22.8 percent below its 52-week high heading into the print that’s supposed to determine whether that pessimism was justified.
The detail that makes this more than routine pre-earnings jitters is the pattern underneath it: memory and storage names, SanDisk down 8.7 percent, Micron down 6.7 percent, took the worst of Monday’s selling, not Nvidia itself. That’s not a broad de-risking story where everything falls together. It’s more specific than that, and it sits awkwardly next to reports that Nvidia’s own largest customers have been told server prices are rising more than 15 percent on systems shipping next year, a sign of tightening supply rather than softening demand.
For Philippine founders with any exposure to tech-adjacent demand, BPO clients, hardware resellers, IT services, Wednesday’s print matters less as a single stock event and more as a read on whether the AI capital expenditure cycle that’s been supporting global tech demand is genuinely intact or has started to crack. A results-driven reversal of the seven-day slide would be the more reassuring outcome. A guidance-driven extension of it would be the signal to watch for spillover into adjacent sectors.
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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