Expectations for economic conditions in the first quarter of 2026 have softened, with firms scaling back optimism and households remaining cautious amid concerns over demand, governance and inflation, according to the Bangko Sentral ng Pilipinas’ latest business and consumer surveys.
Data from the BSP’s fourth quarter 2025 Business Expectations Survey showed business confidence for the next quarter fell to its lowest level in more than four years, reflecting expectations of a post-holiday slowdown and persistent uncertainty over public governance.
The next-quarter confidence index dropped to 23.7 percent from 49.5 percent in the previous survey, the weakest reading since the fourth quarter of 2020.
Firms attributed the weaker outlook to anticipated lower demand for goods and services after the holidays, corruption allegations affecting investor confidence, peso depreciation and higher inflation.
Sentiment for the year ahead also declined, with the confidence index for the next 12 months falling to 40.4 percent from 48.1 percent, citing governance concerns affecting public works spending, weaker demand, inflation, peso depreciation and the risk of a slowdown.
In contrast, business sentiment for the current quarter improved, buoyed by seasonal factors. The fourth-quarter confidence index rose to 29.7 percent from 23.2 percent in the third quarter, driven by higher holiday spending, business process improvements, expansion plans and benign inflation
Consumer sentiment, meanwhile, deteriorated further. The fourth-quarter consumer confidence index fell to -22.2 percent from -9.8 percent, “mainly due to concerns over graft and corruption in the government, higher inflation, lower household income and unfavorable weather conditions and other natural calamities,” the BSP said.
