Business sentiment in the Philippines improved to 8.2 percent in February 2026 from 0.9 percent as firms grew more optimistic about demand, domestic economic conditions and investor confidence, the Bangko Sentral ng Pilipinas (BSP) reported late Friday.
The BSP attributed the improved outlook to expectations of higher income and sales. This was driven by stronger demand for goods and services along with better domestic economic conditions, including higher growth prospects and stable inflation.
The BSP said the February 2026 BES was conducted before the onset of the recent Middle East conflict.
Data from the Business Expectations Survey (BES) showed that firms anticipated an improvement in investor confidence, supported by higher public infrastructure spending and sustained governance reforms.
Sentiment remained upbeat for the next three months as the confidence index (CI) for May 2026 rose to 37.4 percent from 33.3 percent.
“Businesses are counting on favorable weather conditions and typically strong summer revenues to drive near-term growth. They also expect government spending to pick up as investor confidence recovers,” the BSP said.
Looking further ahead, business sentiment strengthened for the full year, with the year-ahead CI climbing to 51.1 percent from 38.6 percent.
“Businesses expect steady consumer demand throughout the year. Firms also see higher public works spending and ongoing governance reforms supporting economic growth in 2026,” the BSP said.
Hiring intentions improved for both the quarter-ahead and year-ahead periods, suggesting resilient labor market conditions. However, expansion plans in the industry sector softened as fewer firms reported intentions to grow their operations. The BSP noted that while respondents expressed optimism about expansion in the short term, they remained cautious in their overall plans.
Inflation expectations remained firmly anchored during the period. The BSP reported that both quarter-ahead and year-ahead averages stayed below the 3-percent target for 2026, though they remained within the tolerance range.
“The sustained recovery in business confidence and stable inflation expectations will therefore depend on how long the conflict lasts and how it affects the domestic economy,” the BSP said.
