Philippines Business Morale at Over 2-Year Low

The Business Confidence Index in the Philippines rose to 29.7 in the fourth quarter of 2025, following a four-year low of 23.2 in the previous three-month period. The improvement was driven by expectations of increased consumer spending during the holiday season. Additionally, firms cited higher firm productivity and operational efficiency, rollout of new products and services, and a favorable inflation environment. During the quarter, sentiment strengthened among retailers (32.2 vs 23.7 in Q3), service providers (39.1 vs 28), and manufacturers (13.6 vs 12.2). Meanwhile, morale deteriorated for constructors (15.5 vs. 31.6). At the same time, the business outlook weakened notably for the next quarter (23.7 vs. 49.5) and the coming year (40.4 vs. 48.1).

The Business Confidence Index in the Philippines fell to 23.2 in third quarter of 2025, from 28.8 in the previous three-month period. This marked the lowest reading since the third quarter of 2021, dragged down by weaker demand during the "ghost month" and the onset of the rainy and typhoon season. During the quarter, sentiment weakened across all sectors, namely retailers (23.7 vs 31.8 in Q2), constructors (31.6 vs 38.2), manufacturers (12.2 vs 17.9), and service providers (28.0 vs 31.7). Meanwhile, the business outlook improved notably for the next quarter (49.5 vs 39.3), but softened for the coming year (48.1 vs 51.0).

The Business Confidence Index in the Philippines dropped to 28.8 in the second quarter of 2025, from 31.2 in the previous three-month period. This marked the lowest reading since the fourth quarter of 2022, dragged down by concerns over the potential economic effects of a 17% reciprocal tariff on Philippine exports to the US. During the quarter, sentiment weakened among manufacturers (17.9 vs 18.3 in Q1), retailers (31.8 vs 34.1), and service providers (31.7 vs 35.9). Conversely, sentiment strengthened among constructors (38.2 vs 35.8). Meanwhile, the business outlook declined for the next quarter (39.3 vs 45.4) and for the coming year (51.0 vs 56.4).