Philippine consumer pessimism eased significantly in the first quarter of 2026 as households bet on a strengthening labor market, though the Bangko Sentral ng Pilipinas (BSP) warned that mounting corruption concerns and Middle East volatility are clouding the year-ahead outlook.
The central bank’s quarterly Consumer Expectations Survey (CES) showed that the consumer confidence index (CI) improved to -15.8% from -22.2% in the previous quarter.
The recovery was driven by expectations of higher household earnings, more stable employment, and an increase in the number of family members entering the workforce.
However, the rebound in sentiment appears fragile. The outlook for the second quarter of 2026 weakened to 1.8% from 3.6%, while the year-ahead index declined to 9.6% from 11.8%.
The BSP cited concerns over graft and corruption—which households believe will undermine public service delivery—as well as rising prices, as the primary drags on long-term optimism.
While inflation expectations for 2026 remain anchored below the central bank’s 3.0% target, the BSP flagged a potential data lag.
The survey was conducted prior to the recent escalation of conflict in the Middle East, meaning the impact of the latest global oil price shocks has yet to be reflected in the data.
The central bank said it is closely monitoring the conflict’s impact on domestic prices and stands ready to take monetary policy action to address persistent inflationary pressures.
The BSP has also authorized regulatory relief measures for banks to assist clients affected by the shifting economic environment.
