Philippine business confidence dips but long-term optimism remains strong
Business confidence in the Philippines weakened in April, with the overall sentiment index dropping further into negative territory. The Bangko Sentral ng Pilipinas (BSP) reported a decline in optimism, though some firms still anticipate stronger demand and improved economic conditions in the coming months.
The BSP’s Business Expectations Survey (BES) confidence index (CI) fell to -35.8 percent in April, down from -24.3 percent in March. Despite the drop, the three-month outlook showed slight improvement, rising to -7.5 percent from -17.3 percent in the previous survey. Over the next 12 months, confidence rebounded to 19.5 percent, up from 11.7 percent.
Firms pointed to expectations of higher sales, better income, and a possible easing of the Middle East conflict as reasons for cautious optimism. However, fewer industrial companies indicated plans for expansion, citing elevated fuel costs and ongoing economic uncertainty. Businesses also reported positive hiring intentions over the next three to 12 months. Inflation concerns remained high, with companies expecting prices to stay above the BSP’s 4.0-percent tolerance threshold over the next year. In response, the central bank reaffirmed its readiness to adjust monetary policy to keep inflation expectations aligned with its 3-percent target. Starting January 2026, the BSP will shift to a monthly BES schedule to better track business sentiment and respond more quickly to economic shifts.
The latest survey highlights mixed signals in the Philippine economy, with short-term pessimism contrasting against a more positive long-term outlook. The BSP continues to monitor inflation risks, particularly from global conflicts, while preparing to implement policy adjustments if needed.
