Market & Mainstreet
Diesel Set to Jump Again While Banks Say Credit Stress Is Contained
The Daily Scan – September 21, 2026 (Mon)
Costs are moving faster than relief. Diesel is expected to jump again this week, the peso closed Friday at P62.749 and the PSEi ended at its lowest level in more than three months. The Department of Finance says it is open to a wealth tax and is pushing tax relief for small firms. The BSP says bank credit stress is mostly in credit cards. Abroad, oil is still above $100 a barrel and the US Federal Reserve raised rates last week.
| USD to PHP | Inflation, August | PSEi |
| P62.749 | 6.1% | 5,855.91, down 1.72% |
SECTION 1 · Philippines
● DoF says it is open to a tax on the richest, if it can be collected
WHAT HAPPENED
Finance Undersecretary Karlo Adriano told reporters the Department of Finance (DoF) is open to a direct tax on wealthy individuals, as long as it can be implemented. The DoF has held two stakeholder briefings on its ProGRESS tax reform bill. A third is set for mid-October in Baguio City. The package includes raising the annual income tax exemption to P350,000 and removing the minimum corporate income tax for micro and small businesses.
UNCERTAIN
The report does not show a specific wealth tax on the table. Adriano said the DoF is still collecting inputs. ProGRESS is a bill, not yet a law, and its final form can change.
WHY IT MATTERS
Our read: removing the minimum corporate income tax would cut a fixed cost for micro and small firms. A higher exemption leaves more pay in your workers’ pockets. A wealth tax, if one is ever proposed, is a separate fight.
RISK
The relief is not guaranteed. Lawmakers can change the package, and the DoF is still taking comments.
OPPORTUNITY
If the bill passes as described, micro and small firms keep more of what they earn.
NEXT MOVE
Ask your accountant how much minimum corporate income tax you paid this year. That is the amount that would go away. Then mark the mid-October Baguio briefing on your calendar.
● Diesel may rise about P10 a liter on Tuesday
WHAT HAPPENED
Jetti Petroleum president Leo Bellas said diesel could rise by P10 to P10.50 a liter on Sept. 22, and gasoline by P4.50 to P5. The estimates use four days of Singapore benchmark prices and the peso-to-dollar rate.
UNCERTAIN
These are estimates, not final prices. Oil firms announce the actual adjustments on Monday for Tuesday. Other estimates in circulation differ slightly.
WHY IT MATTERS
Diesel runs trucks, delivery vans and generators. When it rises, freight and delivery costs follow. A weak peso adds to the bill, since fuel is priced in dollars. The peso closed at P62.749 on Friday.
RISK
Delivery and transport costs can rise faster than you can change your prices.
OPPORTUNITY
A quick review of delivery fees and supplier terms now costs nothing and may protect your margin.
NEXT MOVE
Check your courier and delivery rates today. If diesel is a big share of your costs, decide before your next reorder whether to adjust prices or delivery fees.
● Payments gap narrows to $596 million in August, but the year so far is deeper in the red
WHAT HAPPENED
The Bangko Sentral ng Pilipinas (BSP) reported a balance of payments (BoP) deficit of $596 million in August. That is smaller than July’s $1.47 billion, but a reversal from a $359 million surplus a year ago. Gross international reserves rose to $104.8 billion, enough to cover 6.6 months of imports. The BSP expects a $10.7 billion deficit for the whole of 2026.
UNCERTAIN
RCBC chief economist Michael Ricafort said the gap could widen again if firms stock up on oil and other goods while prices dip, especially if the Strait of Hormuz stays disrupted.
WHY IT MATTERS
The BoP tracks dollars coming in and going out. A deficit means more dollars left than arrived, which adds pressure on the peso. The BSP says reserves are a buffer against shocks.
RISK
The gap could widen again if imports of oil and other goods grow.
OPPORTUNITY
Remittances and services trade kept bringing dollars in, the BSP said.
NEXT MOVE
If you buy inputs in dollars, add a peso buffer to your next quote. Ask suppliers whether they will fix a price for 30 days.
● BSP says banks’ loan loss allowances are rising because of consumer credit, not sector stress
WHAT HAPPENED
The BSP told BusinessWorld that higher provisioning for bad loans is driven mainly by growth in consumer loans, especially credit cards. It said no single bank group explains the rise. The banking system’s gross bad loan ratio was 3.35% in July, up from 3.29% in June and down from 3.4% a year earlier.
UNCERTAIN
This is the regulator’s own reading. In a separate BusinessWorld report, the BSP also said the Middle East conflict may hurt repayment for some borrowers, especially in energy-intensive and trade-dependent sectors and among highly leveraged households.
WHY IT MATTERS
Our read: banks are setting aside more money for losses and watching card debt closely. Small firms borrow from the same banks. How those banks feel about risk shapes who gets credit and at what price.
RISK
If bad loans keep rising, lenders could tighten standards, and small borrowers could feel it.
OPPORTUNITY
Per the BSP, none of this points to a system-wide credit squeeze yet.
NEXT MOVE
Keep business cash and personal credit cards apart. Pay down card balances first if you carry any. Banks look at your full payment record when you ask for a loan.
SECTION 2 · Worth Knowing
● Oil holds near $102 to $104 after a Houthi attack on Riyadh
WHAT HAPPENED
Brent traded around $102 to $104 a barrel on Monday. Iran and the US exchanged new threats, and the Houthis attacked Saudi Arabia’s capital over the weekend, according to Reuters. Saudi Arabia is trying to restart some flows on its main east to west pipeline, which was damaged in attacks last week.
UNCERTAIN
Details on the pipeline restart were thin. JPMorgan analysts said in a Sept. 18 note that Middle East oil flows have been stronger than expected despite the pipeline damage.
WHY IT MATTERS
Pump prices here follow the previous week’s Singapore prices. Oil also feeds the import bill that weighs on the peso.
RISK
A new attack on Saudi facilities could push prices back up.
OPPORTUNITY
A real pipeline restart could ease the pressure.
NEXT MOVE
Put a weekly fuel line in your cash flow plan. Tuesday’s pump price follows last week’s oil, not today’s.
● US and China hold pre-summit talks, with no new trade deal announced
WHAT HAPPENED
US Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng met in New York on Sunday, ahead of the Sept. 24 summit between President Donald Trump and President Xi Jinping in Washington. They discussed setting up a US and China AI dialogue. No other major agreement was announced, and there was no new progress on rare earth supplies.
UNCERTAIN
Markets are watching whether the two sides extend the trade truce that expires Nov. 10, and whether they announce tariff cuts on about $30 billion of goods, according to a Reuters factbox.
WHY IT MATTERS
Our read: many Asian supply chains depend on steady US and China trade, and Philippine importers and exporters sit inside them.
RISK
If the truce lapses on Nov. 10, tariffs could rise again.
OPPORTUNITY
An extension would remove one source of trade risk for Asian exporters.
NEXT MOVE
If you import from or sell to China or the US, note Sept. 24 and Nov. 10. Ask suppliers or buyers how they will handle any tariff change.
● Yen holds near 157 per dollar in thin holiday trade, a week after the Fed hiked
WHAT HAPPENED
The dollar was steady at about 157 yen on Monday. Japan’s markets are closed for its Silver Week holiday until Wednesday. Reuters said investors are wary that the Bank of Japan could step in to support the yen, after the Nikkei reported that Japanese authorities made rate checks on Friday. Last week the US Federal Reserve raised rates by 25 basis points, its first hike since 2023, and signalled another may come before year end.
UNCERTAIN
It is not clear whether Japan will act in the currency market. RCBC chief economist Michael Ricafort said the BSP could match future Fed hikes to keep interest rate gaps healthy and help the peso, which could lead to higher borrowing costs.
WHY IT MATTERS
A stronger dollar makes imports pricier for Philippine firms. If the BSP raises rates to keep up, loans get more expensive too.
RISK
More Fed hikes could keep the peso under pressure and raise borrowing costs.
OPPORTUNITY
If the dollar cools, the peso gets room to recover.
NEXT MOVE
If you have a floating rate loan, ask your bank what happens to your rate if the BSP hikes again. If you buy in dollars, keep a peso buffer in your pricing.
SECTION 3 · THE OPPORTUNITY BEHIND THE NEWS
Your costs are moving now. Your relief is still a proposal.
Put two stories side by side. Diesel is expected to jump about P10 a liter this week, and the peso sits near P62.75 to the dollar. Meanwhile, the Department of Finance is pushing a bill that would remove the minimum corporate income tax for micro and small businesses.
That gap is the real story for a small business owner. The pressure on your costs is here today. The tax relief is a plan that still needs to pass.
The opportunity is a modest one. The founders who come out ahead are usually the ones who already know their numbers. If you know what you pay for delivery, what you pay in minimum corporate income tax and what your imported inputs cost in dollars, you can move fast when a price changes or a law passes. If you do not know, you will be guessing while others act.
This is our reading, not a forecast. Nothing here is law yet, and the bill can change.
SECTION 4 · FOUNDER’S LESSON
Ask what is holding up your headline number.
The BSP’s dollar reserves reached $104.85 billion at the end of August, the highest since March. That sounds like good news, and the cushion is real. It covers about 6.6 months of imports.
Now read the reason. The BSP said the rise came mainly from a higher value on its gold holdings. In the same month, its holdings of foreign currency securities fell to $64.04 billion from $67.16 billion in July, based on BSP data reported by the Daily Tribune. The payments balance was still in deficit.
You see this in small business all the time. Sales jump in one month and it feels great. Then you look closer. One big customer paid early. Or you raised prices and lost some volume. The headline says up. The engine underneath says something else.
So before you celebrate a number, ask one plain question: what is actually holding this up? If the answer is one thing you do not control, treat the number as a cushion. Do not treat it as proof that the business got stronger.
SECTION 5 · ONE REAL SIGNAL
The stress in bank books is sitting in consumer credit. Watch where it goes next.
The BSP put a number on it. The banking system’s gross bad loan ratio was 3.35% in July. That is a two-month high, up from 3.29% in June, but still lower than the 3.4% a year ago.
| P4.01T | 5.67% | 3.29% |
| Consumer loans at end June, up 14.25% from a year earlier | Share of consumer loans that were bad loans, up from 5.42% | Bad loan ratio for the whole banking system at end June |
Now look at where the pressure sits. The BSP says the rise in loan loss allowances comes mainly from consumer loans, especially credit cards. No single bank group explains it.
Business loans look steadier. An earlier Inquirer report on July data said the bad loan ratio on business loans edged down to 3.27%, the lowest in six months.
But the BSP did not say all is well. It flagged that the Middle East conflict may hit borrowers in energy-intensive and trade-dependent sectors, and households that carry a lot of debt. That is a fair warning for any business whose costs run on diesel and dollars.
Our read: this is a signal about the cost and access of credit, not a warning of a banking problem. The BSP says provisioning is in line with growth and that capital buffers are strong. But higher fuel costs and a weak peso can turn a healthy business loan into a slow one. If your cash is tight, talk to your bank early.
What to watch next: the BSP’s August bad loan data, and whether lenders start to tighten for small borrowers.
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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