Market & Mainstreet
Shell Pilipinas Swings to a P2.7 Billion Loss, Remittance Growth Hits a 4-Year Low, and Trump Calls the Strait of Hormuz “US Territory”
The Daily Scan – August 18, 2026 (Tue)
Shell Pilipinas swung to a P2.7 billion first-half loss as Middle East oil volatility hammered its fuel marketing margins, a direct sign that the Gulf disruption covered in this edition is not just a forecasting risk but a line item already hitting Philippine corporate results. Cash remittances grew at their slowest annual pace in over four years even as June’s total hit a six-month high, BSP Governor Eli Remolona warned inflation will not return to target until 2028, and the PSEi slipped below 6,300 on thin trading. San Miguel bucked the trend with a 48 percent jump in core profit. Globally, President Trump said the US controls the Strait of Hormuz and floated declaring it US territory as the June transit agreement with Iran expired without renewal, while the dollar fell to a three-month low on fading bets for a Fed rate hike, and Brent crude settled just below $91 a barrel.
| Cash Remittances (June) | BSP 2026 Inflation Forecast | PSEi Close (Aug 17) |
| $3.04B, slowest growth in 4+ yrs | Averaging 6.4 percent | 6,261.80, down 0.56 percent |
SECTION 1 · Philippines
● Shell Pilipinas swings to a P2.7 billion loss as Middle East war volatility crushes fuel margins
WHAT HAPPENED
Shell Pilipinas Corp. posted a net loss of P2.7 billion in the first half, a sharp reversal from P965.3 million in net income a year earlier, as weaker demand and oil price volatility from the Middle East war hit operations. Net sales rose 28.8 percent to P146.97 billion on surging pump prices, but cost of sales climbed 36 percent to P140.45 billion. Core earnings also fell into the red at a P1.89 billion loss versus a P1.98 billion core profit last year, due to a steep decline in fuel marketing margins.
UNCERTAIN
The company attributes the margin squeeze to a timing lag between rapidly rising global product costs and local market prices. How long that lag persists, and whether margins recover once prices stabilize, isn’t detailed in available coverage.
WHY IT MATTERS
This is one of the clearest, most concrete signs yet that the Gulf oil disruption is not an abstract forecasting risk for the Philippines. It is already showing up as a multibillion peso loss at one of the country’s largest fuel retailers, with knock-on effects for every business that depends on fuel and logistics.
RISK
Businesses that assumed fuel retailers were simply passing through higher costs to consumers should note that margins are compressed on both ends. This suggests continued upward pressure on pump prices is likely if retailers try to rebuild profitability.
NEXT MOVE
Watch for pump price movements in the coming weeks as fuel retailers try to close the margin gap, and monitor whether other oil majors operating in the Philippines report similar first-half losses.
● Remittance growth skids to a four-year low even as June’s total hits a six-month high
WHAT HAPPENED
Cash remittances coursed through banks rose 1.7 percent year on year to $3.04 billion in June, the highest monthly level in the first half of 2026, according to BSP data. But that 1.7 percent growth was the weakest annual pace in four years and four months, since February 2022. For the first six months, cash remittances reached $17.15 billion, up 2.4 percent from $16.75 billion a year earlier.
UNCERTAIN
UnionBank chief economist Ruben Carlo Asuncion linked the slowdown partly to Middle East conflict uncertainty weighing on labor deployment, but the precise split between that factor and other causes, such as slower wage growth in host countries, isn’t detailed in available coverage.
WHY IT MATTERS
Remittances are one of the most important supports for Philippine household spending and foreign exchange, equivalent to roughly 7 to 8 percent of GDP. A four-year-low growth rate, even with a headline-friendly monthly high, suggests the underlying trend is softer than the topline number implies, echoing the same Middle East disruption pattern showing up in Shell Pilipinas’ results above.
RISK
Businesses reliant on consumer spending funded partly by remittances should watch this trend closely. A continued slowdown in growth, even without an outright decline, could gradually soften household spending capacity over time.
NEXT MOVE
Watch BSP’s full-year remittance forecast of 2.7 percent growth to $36.6 billion for signs of further downward revision if Middle East-linked deployment uncertainty persists.
● BSP warns inflation won’t return to target until 2028, leaving the door open for more rate action
WHAT HAPPENED
BSP Governor Eli Remolona told lawmakers Monday that broadening price pressures are expected to keep inflation elevated in the near term, delaying a return to target until 2028. The central bank sees headline inflation averaging 6.4 percent this year, before easing to 4.5 percent in 2027 and 3.1 percent in 2028, and Remolona said risks remain tilted to the upside due to threats of second-round effects.
UNCERTAIN
This lands only a day after Standard Chartered suggested BSP’s tightening cycle may be over. The central bank’s own language, leaving the door open for further monetary action, is more cautious than that outside forecast, so the two views are not fully aligned.
WHY IT MATTERS
A 6.4 percent inflation average this year, with a target return pushed all the way to 2028, is a materially longer and higher path than the more optimistic bank forecasts circulating this week. It suggests businesses should not assume rate relief is imminent just because some analysts are calling the tightening cycle over.
RISK
Businesses planning around an assumed rate cut in the near term should treat BSP’s own inflation timeline as the more authoritative signal. A 2028 target return implies borrowing costs could stay elevated well beyond what some bank forecasts suggest.
NEXT MOVE
Watch the next BSP policy meeting for whether this more cautious tone translates into an actual pause on rate cut discussions, and track how Gulf oil prices factor into the “second-round effects” Remolona flagged.
● San Miguel’s core profit jumps 48 percent as fuel, power, and food businesses stay resilient despite volatility
WHAT HAPPENED
Diversified conglomerate San Miguel Corp. reported a 48 percent jump in core net income to P54.2 billion in the first half, with revenues up 34 percent to P964.1 billion. The expansion was driven by higher volumes and prices in its fuel and oil business, stronger contributions from power, and continued growth in food, despite volatile global markets, higher costs, and cautious consumer spending.
UNCERTAIN
San Miguel’s fuel and oil business is benefiting from the same higher pump prices that pushed Shell Pilipinas into a loss above. How the two companies can post such different results in the same sector isn’t explained in available coverage, and may come down to differences in hedging, scale, or business mix.
WHY IT MATTERS
This is a useful counterpoint to Shell Pilipinas’ loss story above. It shows that Middle East oil volatility is not uniformly bad for every Philippine energy-linked company. Diversification across fuel, power, and food appears to be cushioning San Miguel in a way pure fuel retail is not.
OPPORTUNITY
Businesses evaluating exposure to the current oil volatility should note that diversified energy plays, not just pure fuel retailers, may be better positioned to weather this environment, a distinction worth factoring into supplier or partner risk assessments.
NEXT MOVE
Watch San Miguel’s full-year guidance for whether management expects this pace of growth to continue, particularly in the fuel and power segments most exposed to Middle East volatility.
SECTION 2 · Worth Knowing
● Trump says the US controls the Strait of Hormuz and floats declaring it US territory as the June memorandum expires
WHAT HAPPENED
President Trump told reporters at the White House that the Strait of Hormuz is open and the US is in control, and said it would be a great idea to declare the Strait US territory. The comments came as the June memorandum of understanding between the US and Iran on Hormuz transit technically expired Monday without renewal. Oil ticked higher as prospects for a resolution receded, with WTI rising toward $85 a barrel after ending Monday 2.6 percent higher, and Brent settling just below $91.
UNCERTAIN
Whether this is a genuine policy proposal or rhetorical pressure ahead of renewed negotiations isn’t clear. The two sides remain far apart on a host of issues related to the Strait, and no follow-up policy action has been announced.
WHY IT MATTERS
This is a marked escalation in rhetoric from the earlier “indefinite blockade” framing, and it lands the same day Shell Pilipinas reported a multibillion peso loss tied directly to this same disruption. Escalating rhetoric with an expired agreement and no replacement in sight points toward continued, not easing, uncertainty.
RISK
Businesses should treat the expired memorandum, combined with more aggressive US rhetoric, as a signal that near-term resolution is less likely, not more, despite the technically higher control Washington claims to have established.
NEXT MOVE
Watch for any formal US policy statement following through on the territorial claim rhetoric, and monitor whether Iran responds with renewed attacks or further hardens its negotiating position.
● Dollar falls to a three-month low as traders scale back bets on a Fed rate hike
WHAT HAPPENED
The dollar fell to its weakest level in three months as investors scaled back expectations for further Federal Reserve interest rate increases following a run of softer US economic data. The Bloomberg Dollar Spot Index dropped for a third straight day to its lowest since May 15, as traders cut the odds of a Fed hike next month to about one in three, down from roughly 75 percent in late July.
UNCERTAIN
Fed policy this cycle has been unusually volatile, swinging from rate cut expectations earlier in the year to hike bets after the Iran conflict reignited inflation concerns. Whether this latest dovish shift holds through the September meeting isn’t guaranteed.
WHY IT MATTERS
A weaker dollar tends to ease imported inflation pressure for countries like the Philippines by making dollar-denominated oil and other imports relatively cheaper in peso terms, a modest offset to the same Gulf-driven cost pressure showing up elsewhere in this edition.
OPPORTUNITY
Businesses with dollar-denominated costs or debt may see some near-term relief if the dollar’s slide continues, though this needs to be weighed against the oil price pressure moving in the opposite direction.
NEXT MOVE
Watch the peso-dollar exchange rate for whether it reflects this broader dollar weakness, and track the September Fed meeting for confirmation of whether the hike odds continue to fall.
● Gold climbs further as Israel strikes Lebanon and Trump prepares new sanctions to force Iran’s surrender
WHAT HAPPENED
Gold rose to $4,429.49 per troy ounce on August 18, up 0.30 percent from the previous day and up 33.53 percent from a year ago, as investors sought safety amid fresh escalation. Israel launched new strikes on Lebanon over the weekend, and President Trump is preparing new economic sanctions aimed at forcing Iran to surrender, even as some Middle Eastern producers are covertly moving crude through the Strait of Hormuz, which has kept oil prices from spiking further despite the rising tension.
UNCERTAIN
The scale and target of Trump’s prepared sanctions haven’t been detailed publicly yet, and it isn’t clear whether the Lebanon strikes represent a widening of the conflict or a contained, separate front from the Hormuz standoff.
WHY IT MATTERS
Gold’s steady climb, even as oil stays relatively contained through covert crude flows, signals that institutional investors see this conflict broadening and lengthening, not resolving. That reading lines up with Monday’s expired US-Iran memorandum and Trump’s Strait of Hormuz territorial comments covered above.
RISK
Businesses should note that gold’s rise reflects a market-wide judgment that geopolitical risk is rising, not falling, a useful cross-check against any narrative suggesting the conflict is winding down.
NEXT MOVE
Watch for details of the new US sanctions package on Iran, and monitor whether Israel’s strikes on Lebanon draw a wider regional response that could reverse the covert crude flows currently keeping oil prices in check.
SECTION 3 · THE OPPORTUNITY BEHIND THE NEWS
Two Oil Companies, Two Opposite Results, One Lesson About Exposure
Shell Pilipinas posted a P2.7 billion loss while San Miguel’s fuel and power segments helped drive a 48 percent core profit jump, both companies operating in the same Middle East-disrupted oil market during the same first half. The difference is not luck. It is business mix and how each company is positioned across the value chain, from pure fuel retail margins that get squeezed by timing lags, to diversified operations spanning fuel, power, and food that can absorb a hit in one segment with gains in another.
For business owners, the practical read is to look past headline sector exposure and ask a more specific question: which part of the value chain am I actually in, and does that position benefit or suffer when input costs spike. A supplier one step removed from where San Miguel sits might be thriving right now, while one positioned like Shell Pilipinas is absorbing losses in the exact same environment.
SECTION 4 · FOUNDER’S LESSON
A Growth Number Can Hide a Slowing Trend, Read Past the Headline Figure
June’s cash remittances hit a six-month high of $3.04 billion, a number that reads as good news on its own. But that same figure represented the slowest annual growth rate in over four years. Both facts are true at once, and a founder who only looked at the headline high would miss the more important underlying story: growth is decelerating, even as the absolute number looks strong.
The lesson is to build the habit of checking your own numbers the same way. A record month in revenue or signups can mask a slowing growth rate if you only compare it to last month instead of to the trend over the past year. Before celebrating a headline high, ask what the growth rate looks like against the same period last year, and whether that rate is accelerating or decelerating. That second number often tells you more about where the business is actually heading.
SECTION 5 · ONE REAL SIGNAL
A Territorial Claim Over an Expired Agreement Is a Bigger Signal Than It Sounds
President Trump floating the idea of declaring the Strait of Hormuz US territory is easy to read as just another headline in a six-month-old conflict. But the timing matters more than the rhetoric. This comment came the same day the June transit memorandum between the US and Iran technically expired without a replacement, and the same day Shell Pilipinas confirmed the disruption has already cost it P2.7 billion in the first half alone.
Read together, these are not three separate stories. They are one story about a conflict that has moved past temporary disruption into something that is reshaping how companies plan and report earnings. When a US president is publicly floating territorial claims over a shipping chokepoint instead of announcing a deal, and a major fuel retailer’s losses confirm the cost is already real, the practical question for Philippine founders is not whether this resolves soon. It is how a P2.7 billion-scale hit might show up in your own supply chain if it does not.
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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