Business confidence falls to near-pessimism levels
Business confidence in the Philippines faltered at the start of 2026 amid a widening anticorruption campaign that has exposed governance lapses and damped sentiment.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the business confidence index (CI) in January stood at 0.9 percent.
While the reading remained in positive territory—indicating that optimists still outnumbered pessimists—it marked a sharp drop from 29.7 percent in the fourth quarter of 2025.
The result came from the central bank’s inaugural monthly business expectations survey, part of a shift away from quarterly polling aimed at effectively capturing any shifts in sentiment amid rapidly changing domestic and external developments.
Each monthly round now covers about 500 firms nationwide, roughly a third of the 1,500 companies surveyed under the previous quarterly format.
Businesses appeared less confident as the economy faces a high-profile corruption scandal that has implicated several public officials and stalled government spending. The confidence shock prompted the BSP to lower its key rate to an over three-year low of 4.25 percent, though the central bank acknowledged that its capacity to support the sluggish economy may be reaching its limits.
But despite the central bank’s efforts to spur bank lending and economic activity, companies polled expected tight cash position and credit access in January. The financial condition index and the credit access index came in at -19.2 percent and -0.6 percent, respectively.
Respondents likewise cited stiff domestic competition, insufficient demand and sticky interest rates as major constraints to business activities in the first month of the year.
Modest optimism
Still, the survey showed that companies found modest optimism in higher consumer demand for select products and services—including garments, education, loan products, mailing and shipping services and motor vehicle parts—as well as in ongoing business process improvements.
Looking ahead, expectations improved for the near and medium term. The three-month-ahead CI rose to 33.3 percent, while the year-ahead gauge climbed to 38.6 percent, signaling stronger confidence for the next quarter and over the next 12 months.
Hiring intentions also remained positive as 14.1 percent of industry firms plan expansion next quarter and 24.3 percent expect growth over the next year.
Businesses anticipate inflation to rise in January, in the second quarter, and over the next 12 months, though still within the BSP’s 2 to 4 percent target range.
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