Business confidence sinks further in April

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May 30, 2026 | 12:00am

MANILA, Philippines — Business sentiment in the Philippines deteriorated further in April, as companies grew more concerned about elevated oil prices, rising inflation and weakening consumer purchasing power amid the ongoing Middle East conflict, according to the Bangko Sentral ng Pilipinas.

Results of the BSP’s Business Expectations Survey (BES) showed that the overall business confidence index fell to -35.8 percent in April from -24.3 percent in March, indicating that pessimistic firms continued to outnumber optimistic ones.  

“Concerns over the ongoing Middle East conflict, which has kept oil prices elevated, weighed on business confidence in April 2026. Firms reported that higher inflation could raise operating costs and erode consumers’ purchasing power,” the BSP said. 

 The latest reading marked the second straight month of negative business sentiment after the confidence index plunged to -24.3 percent in March from 8.2 percent in February. 

Despite the weaker current outlook, businesses were less pessimistic about the months ahead.

The confidence index for the next three months improved to -7.5 percent from -17.3 percent, while the 12-month outlook rose to 19.5 percent from 11.7 percent. 

The BSP said firms were less pessimistic about the near term because the start of the academic year is expected to boost demand for loans and financing products, as well as clothing and apparel. 

Looking a year ahead, businesses cited anticipated stronger demand for business process outsourcing, construction and transportation services, along with expectations of higher sales and income, better economic conditions and a possible resolution of the Middle East conflict. 

Meanwhile, firms reported tighter financial conditions and more limited access to credit. The financial condition index worsened to -35.5 percent in April from -24.9 percent in March, while the credit access index slipped to -9.9 percent from -7.1 percent.

 Respondents in the industry and construction sectors also reported lower average capacity utilization, which fell to 69.9 percent from 73.1 percent previously as more firms operated below 50 percent capacity. Businesses across most industry subsectors and construction scaled back operations during the month.

 Major constraints cited by firms included domestic competition, weak demand and high interest rates. Companies also pointed to elevated oil prices stemming from the Middle East conflict as an added burden because of their impact on production costs.

 Hiring prospects showed some improvement. The employment outlook index for the next three months turned positive at 6.1 percent from -0.1 percent in March, while the 12-month outlook remained favorable at 9.5 percent, although slightly lower than the previous month’s 10 percent.

However, expansion plans moderated despite the improved long-term outlook. The share of industry firms planning to expand over the next three months dropped to 14 percent from 28.8 percent, while those planning expansion over the next 12 months declined to 19 percent from 30.7 percent. Firms cited heightened demand uncertainty linked to the Middle East conflict.

The April BES was conducted from April 7 to April 30 and covered 507 firms nationwide. Of the respondents, 193 were based in the National Capital Region while 314 were located outside Metro Manila.