Philippines Business Morale at 4-Year Low

The Business Confidence Index in the Philippines turned negative at -24.3 in March 2026, reversing from 8.2 in the previous month. The pessimistic sentiment was driven by the ongoing US–Iran conflict, which pushed domestic fuel prices sharply higher. Additionally, firms cited expectations of weaker consumer spending, as elevated fuel costs continued to feed through into broader prices of basic goods and services. During the month, sentiment continued to weaken regarding financial conditions (-24.9 vs -19.2 in February), access to credit (-7.1 vs -0.6), and order books (-2.7 vs -0.1), while it became less positive regarding the volume of business activity (2.2 vs 3.5). Meanwhile, the business outlook declined notably for the next three months (-17.3 vs 37.4), while confidence softened significantly for the coming year (11.7 vs 51.1).

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).