Philippine businesses were cautiously optimistic about the economy in the second quarter of 2025, primarily concerned about the potential impact of reciprocal tariffs on Philippine exports to the United States and uncertainty over their implementation.
An expected slowdown in business activity after the May midterm elections and the sugar off-milling season also weighed on business confidence.
The overall business confidence index (CI) decreased to 28.8 percent in the second quarter from 31.2 percent in the first quarter of 2025, results of the latest Business Expectations Survey (BES) from the Bangko Sentral ng Pilipinas (BSP) showed.
A positive CI indicates more respondents are optimistic than pessimistic.
Looking ahead, business confidence for the next quarter and next 12 months moderated, with CIs at 39.3 percent and 51.0 percent respectively. Both figures were lower than the previous quarter and year-ago levels.
CIs for the next quarter and next 12 months remained positive, reflecting businesses’ continued optimism about near-term economic prospects.
Firms also expect inflation over the next 12 months to stay within the national government’s target range, indicating well-anchored business inflation expectations. Within-target inflation supports investments and job creation.
The BES is a key economic surveillance tool for the BSP, and its results are important inputs to monetary policy formulation.
