Market & Mainstreet
Growth Slows, Prices Stay High, and Factories Keep Humming Anyway
The Daily Scan – August 03, 2026 (Mon)
Economists polled ahead of Friday’s official data see second-quarter GDP growth at just 2.6-2.8%, the weakest stretch since the pandemic, while July inflation likely held at a painful 6.4% for a fifth straight month above target. Meralco customers start getting a combined P9.5 billion back on their bills this cycle, and the BSP is moving to police abusive online lenders once it takes over the sector. Meanwhile, factory activity just posted its third straight month of expansion, a rare bright spot in an otherwise grim data week.
| Q2 GDP Forecast | July Inflation Forecast | Meralco Refund |
| 2.6-2.8%, slowest since 2021 | 6.4%, 5th month above BSP target | P9.5B over 6 months, ~P117/mo avg household |
THE SNAPSHOT
The week opens with a rough data picture: economists expect Friday’s official GDP print to show the slowest quarterly growth since the pandemic, and July inflation likely stayed locked above the central bank’s ceiling for a fifth straight month. Set against that, two pieces of real relief landed this weekend: a P9.5 billion Meralco refund starts hitting bills, and the BSP signaled it’s finally ready to go after predatory online lenders. Factories, for what it’s worth, didn’t get the memo on the gloom.
SECTION 1 · Philippines
● Economists expect Q2 growth to slow to around 2.6%, the weakest in years
WHAT HAPPENED
A Manila Times poll of economists put the median second-quarter GDP forecast at 2.6%, down from 2.8% in the first quarter and well below the 5.4% recorded a year earlier. A separate BusinessWorld poll landed at 2.8%. Both are far below the government’s already-lowered 3.5-4.5% full-year target. Pantheon Macroeconomics gave the lowest estimate, 1.8%, citing stagnant public spending that is also weighing on fixed investment. The Philippine Statistics Authority releases the official figure this Friday, Aug. 7.
UNCERTAIN
Forecasts range widely, from 1.8% to nearly 3%, reflecting real disagreement among economists about how much the Middle East conflict and weak government spending actually dragged on the quarter versus how much exports offset it.
WHY IT MATTERS
To hit even the low end of the government’s target range for the year, the economy now needs to average 3.7% growth in each of the next two quarters, a big jump from anything posted so far in 2026. That makes the rest of the year a real test of whether infrastructure and government spending actually pick up as officials have promised.
RISK
If growth keeps missing target, expect renewed pressure on the BSP to cut rates even as inflation stays elevated, a difficult combination for any business planning around borrowing costs.
NEXT MOVE
Watch Friday’s official GDP release closely. A miss on the low end of forecasts would likely reopen the conversation about whether the government’s full-year target is still realistic.
● July inflation likely held at 6.4%, still far above target
WHAT HAPPENED
A BusinessWorld poll of 21 economists put the median July inflation forecast at 6.4%, unchanged from June and sharply higher than the 0.9% recorded a year ago. That would make July the fifth straight month headline inflation stayed above the BSP’s 4% ceiling. Lower rice prices likely offset higher fuel and electricity costs. The estimate falls within the BSP’s own 5.6-6.6% forecast range. The PSA releases official data Wednesday, Aug. 5.
UNCERTAIN
Forecasts among individual economists ranged from 6.0% to 6.9%, with the spread coming down to how much weight each gives to renewed fuel price increases tied to US-Iran tensions versus continued easing in food prices.
WHY IT MATTERS
Elevated inflation stacked on top of slowing growth is the uncomfortable combination the BSP has been managing all year. It limits how much room the central bank has to cut rates to support growth, since doing so risks reigniting price pressures that are already running well above target.
RISK
Businesses with thin margins on essentials, especially food, fuel-dependent logistics, and transport, are absorbing a fifth straight month of above-target cost pressure with no clear relief date.
NEXT MOVE
If you price goods or services with fuel or electricity as a major input cost, build in room for continued volatility rather than assuming costs will normalize soon.
● ERC orders Meralco to refund P9.5 billion to over 8 million customers
WHAT HAPPENED
The Energy Regulatory Commission directed Meralco to refund P9.5 billion in over-collections to more than eight million customers, equivalent to an average rate of P0.3448 per kilowatt-hour. Residential customers get the biggest share, P0.5861 per kWh, working out to roughly P117 a month for a typical household using 200 kWh. The refund covers amounts collected beyond authorized charges in 2025 and will appear as a separate line item on bills over six months, shorter than the 36 months Meralco had proposed. Meralco said it will comply starting the next billing cycle.
UNCERTAIN
The ERC is separately evaluating Meralco’s rate-reset application, with a decision expected by late August or September that could raise or lower the utility’s distribution charges, so this refund is not necessarily the final word on what customers pay this year.
WHY IT MATTERS
This is real, near-term relief landing at a moment when inflation is already squeezing households and small businesses. For businesses with high electricity usage, the refund shows up automatically on the bill rather than requiring any action, but the amount is modest relative to overall cost pressure.
OPPORTUNITY
Businesses that budget tightly around utility costs can factor the refund into cash flow planning for the second half of the year, since the schedule and per-kWh rate are now fixed.
NEXT MOVE
Check your next few Meralco bills for the new AWAT refund line item, and watch the pending rate-reset decision later this year since it could offset or add to what you’re getting back now.
● BSP prepares to crack down on abusive online lenders once it takes over oversight
WHAT HAPPENED
BSP General Counsel Roberto Figueroa said the central bank will prioritize regulating predatory lending and abusive debt collection by online lending companies once it formally takes over oversight from the SEC. Both regulators have agreed to the transfer in principle, though the mechanics are still being worked out, either through circulars under existing law or a new law amending the SEC’s authority. Separately, the SEC has already set fines of P60,000 to P500,000 for lenders caught using unfair collection tactics, and lifted its five-year moratorium on new online lending platforms starting Aug. 1, with new capital requirements attached.
UNCERTAIN
Whether the oversight transfer happens through administrative action or requires new legislation is still undecided, and the legislative route would be slower, especially with the Senate currently occupied by the impeachment trial.
WHY IT MATTERS
Online lending has become a real source of working capital for many small businesses and gig workers, but the same platforms have also produced widespread harassment complaints. A BSP takeover, paired with new capital requirements on platform operators, would raise the bar for who can legally operate in the space.
OPPORTUNITY
Legitimate fintech lenders that already meet stricter standards may benefit as weaker, undercapitalized platforms get squeezed out by the new paid-up capital rules.
NEXT MOVE
If your business or your customers rely on online lending platforms for credit, expect tighter capital and conduct rules to reshape the sector over the next year. Verify any lender’s registration with the SEC in the meantime.
SECTION 2 · Worth Knowing
● Apple posts record quarter, but warns a global chip shortage will squeeze growth ahead
WHAT HAPPENED
Apple reported its strongest June quarter ever, with revenue up 16% to $109.4 billion and earnings per share up 29% to $2.02, beating Wall Street estimates. iPhone revenue rose 22% to a record $54.25 billion. But the company guided to September-quarter revenue growth of just 9-11%, below the 12% analysts expected, citing worsening supply constraints. Apple already raised prices on Macs and iPads because of a global memory-chip shortage, and Mac revenue jumped 29% partly on customers buying ahead of further price hikes; iPhone prices haven’t gone up yet, but analysts widely expect an increase at September’s launch.
UNCERTAIN
Analysts are split on how long the chip shortage lasts: one Bloomberg Intelligence analyst thinks the crunch may have already peaked, while SK Hynix’s own July forecast named 2027, not 2026, as the worst year yet for the industry.
WHY IT MATTERS
The shortage traces back to AI data centers now consuming roughly 70% of memory-chip production, plus TSMC’s advanced manufacturing capacity being sold out through at least 2027. That’s a structural, not seasonal, supply problem, and it means higher hardware costs are likely to persist well beyond this one earnings cycle for any business that buys computers, tablets, or components at scale.
RISK
Businesses planning hardware refreshes or fleet upgrades should expect continued price increases and longer delivery times on laptops, tablets, and components tied to memory chips, not just from Apple but across the industry.
NEXT MOVE
If your business has hardware purchases planned for later this year, consider locking in pricing or placing orders sooner rather than waiting, given the shortage is expected to worsen before it eases.
● Asian markets rally as oil prices drop on US-Iran de-escalation
WHAT HAPPENED
India’s Sensex and Nifty indices opened sharply higher Monday, with the Sensex gaining over 10% at the open, after crude oil prices fell on news that the US will refrain from fresh military strikes on Iran. Broader Asian and European equities also advanced. The move followed reports that Trump-administration officials expect Iran talks to resume this week, though no deadline for a deal has been set.
UNCERTAIN
Talks resuming is not the same as a deal being reached, and markets have swung on Iran-related headlines multiple times already this year without a durable resolution.
WHY IT MATTERS
Lower oil prices, if they hold, would ease one of the biggest sources of imported inflation pressure the Philippines has faced this year, the same fuel costs that BSP and private economists cited repeatedly as driving July’s inflation estimate. A genuine de-escalation would be good news for any business with fuel or logistics exposure.
OPPORTUNITY
Sustained lower oil prices would give the BSP more room to ease policy without reigniting inflation, which would lower borrowing costs across the board.
NEXT MOVE
Track how Monday’s Iran talks develop before making any fuel-cost assumptions for the rest of the quarter. The relief so far is based on a pause in strikes, not a resolved conflict.
SECTION 3 · THE OPPORTUNITY BEHIND THE NEWS
Maharlika Wants to Be the Middleman for Pax Silica, Not the Money
Maharlika Investment Corp.’s president said the sovereign wealth fund is in talks with the Bases Conversion and Development Authority to serve as an aggregating vehicle for investment into Pax Silica, the 1,618-hectare AI-native industrial hub planned for New Clark City, Tarlac. Notably, he said Maharlika doesn’t expect to put its own capital in; the real money is expected to come from foreign direct investment, with Maharlika potentially just organizing how it flows in.
That’s a specific, actionable detail for anyone watching this corridor: the government is signaling it wants private and foreign capital to do the heavy lifting, with state vehicles playing a coordinating role rather than a funding one. If you’re in industrial real estate, construction, logistics, or specialized labor near Tarlac and Central Luzon, this points to a genuine multi-agency push rather than a single funding announcement, worth tracking as the BCDA dialogue firms up.
SECTION 4 · FOUNDER’S LESSON
Know What You’re Not Equipped to Do
In the same interview about Pax Silica, Maharlika’s president was asked whether the fund plans to invest directly in AI companies or AI stocks. His answer was a flat no: he said the fund lacks the capacity, capital, and expertise to pick winners across a sector spanning power generation, semiconductor manufacturing, and end-user applications. Instead, Maharlika is betting on its existing portfolio companies adopting AI to become more efficient, rather than trying to pick AI winners itself.
That’s a useful discipline for any founder facing a hot trend they feel pressure to chase. Knowing your fund, team, or business genuinely lacks the expertise to compete in a specific opportunity, and saying so plainly instead of forcing a play anyway, is often the harder and more valuable decision. The better move can be applying the trend to what you already do well rather than entering a market you’re not built for.
SECTION 5 · ONE REAL SIGNAL
Factories Just Posted Their Third Straight Month of Growth, Despite Everything
The S&P Global Philippines Manufacturing PMI edged up to 51.8 in July from 50.9 in June, marking a third consecutive month above the 50 threshold that signals expansion. Both output and new orders rose at faster rates, driven by stronger client demand and new business wins, a genuine shift after subdued readings from March through June. Manufacturers reported renewed inflationary pressure too, tied to the same Middle East-driven cost increases showing up elsewhere in this edition, and they’re passing those costs on to customers.
The signal worth watching here is the contrast: GDP forecasts are at their weakest since the pandemic and inflation is stuck above target, yet the manufacturing sector itself is quietly building momentum for a third straight month. That’s not a contradiction so much as a reminder that headline GDP numbers can mask real strength in specific sectors. If you’re in or adjacent to manufacturing, this run of PMI data is a genuine data point, not spin, worth weighing against the gloomier macro headlines this week.
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.
