Why is Phillip discouraged when he envisions were he thinks he is in "The Cay"?
From the description that Timothy has reluctantly given him, Phillip envisions that they are on one of "several small islands tucked up inside great banks of coral that (make) navigation dangerous". This would mean that no ship will pass even close to where they are located, making the likelihood of rescue by sea unlikely. Realizing this possibility, Phillip is afraid that he and Timothy are essentially trapped on the island, maybe forever.
Phillip had wanted to stay on the raft, believing that they would eventually be spotted and saved, but Timothy had been convinced that it would be safer to wait on land for rescue, and had been delighted when he had spotted the cay. After a brief exploration of the island, however, Timothy is somewhat dismayed. He suspects that they have landed at a place called "Debil's Mout'...a U-shaped ting, wit dese sharp coral banks on either side, runnin' maybe forty, fifty mile". Timothy hopes that he is mistaken about their location, but even if he is not, he believes that they might still be spotted by aircraft flying above. When Phillip frantically points out that, even if they were to be spotted, any pilot would most likely assume that they were just "native fisher(men) (because) no one else would come (there)", Timothy replies only that they "cannot fret 'bout it", and would just have to "make camp an' see what 'appens" (Chapter 8).