Business confidence stays positive in January

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February 28, 2026 | 12:00am

MANILA, Philippines — Philippine businesses remain optimistic about the economy on the back of higher consumer demand and enhancements in business processes, according to the Bangko Sentral ng Pilipinas.

The BSP’s maiden release of the now monthly (instead of quarterly) Business Expectations Survey (BES) showed that the current-month confidence index (CI) stood at 0.9 percent in January, indicating that optimistic firms still slightly outnumbered pessimistic ones.

“The continued positive outlook in January 2026 is supported by expectations of higher consumer demand and enhancements in business processes,” the BSP said.

However, the central bank said this was weaker than the 29.7 percent recorded in the fourth quarter of 2025, reflecting more cautious views among businesses at the start of the year.

Surveyed companies also flagged several constraints affecting current operations, including stiff domestic competition, insufficient demand and high interest rates.

Despite the softer current sentiment, firms expect business conditions to improve in the near term.

The confidence index for the next three months stood at 33.3 percent, while the year-ahead outlook reached 38.6 percent, supported by expectations of stronger consumer demand, improved domestic economic conditions and better investment prospects.

The central bank survey also showed tighter financial conditions among firms. 

The financial condition index remained negative at minus 19.2 percent, while the credit access index slipped to minus 0.6 percent, suggesting that businesses continued to face challenges related to cash flow and financing availability. 

Average capacity utilization in the industry and construction sectors stood at 69.6 percent in January.
Meanwhile, hiring and expansion plans pointed to a more upbeat outlook.

The employment outlook index improved to 11.3 percent for the next quarter and 23.3 percent for the next year, while 24.3 percent of industry firms reported expansion plans over the year ahead.

On the macroeconomic front, businesses expect the peso to slightly slip to an average exchange rate of around P58.99 per dollar over the next 12 months.

Inflation expectations were seen remaining manageable, averaging 2.6 percent over the same period, still within the BSP’s target range.

Ditching its scheduled quarterly report, the BSP’s January report marked the launch of its monthly BES, to allow closer monitoring of business confidence amid the rapidly changing domestic and external developments.

The fourth quarter 2025 BES was conducted from Jan. 9 to 13, covering 507 firms nationwide, with respondents drawn from the top 7,000 corporations based on assets.

The BSP said the shifting to a monthly survey will strengthen its macroeconomic surveillance toolkit by providing more timely signals on business conditions and expectations.