Filipino as consumers turned more cautious in the fourth quarter of 2025 while businesses became more optimistic, underscoring a mixed economic outlook that remains important for macroeconomic policy, according to the Bangko Sentral ng Pilipinas (BSP).
Results of the BSP’s Consumer Expectations Survey (CES) showed the overall consumer confidence index (CI) falling sharply to -22.2 percent in Q4 2025, from -9.8 percent in Q3 2025, reversing the relative improvement seen in the previous quarter. Consumers cited concerns over graft and corruption, higher prices, weaker household incomes, and the effects of unfavorable weather and natural calamities. A negative CI means pessimistic views outweighed optimistic ones.
Despite the deterioration in current sentiment, forward-looking indicators remained positive. Consumer confidence stood at 3.6 percent for the next quarter and 11.8 percent for the next 12 months, broadly unchanged from earlier surveys, suggesting expectations of recovery. Consumers also continued to expect inflation to stay within the National Government’s (NG) target range—consistent with prior CES rounds—indicating well-anchored household inflation expectations, which support spending, investment, and job creation.
In contrast, business sentiment strengthened further. The Business Expectations Survey (BES) showed the overall business CI rising to 29.7 percent in Q4 2025, from 23.2 percent in Q3 2025, extending the upbeat trend seen since mid-year. Firms pointed to stronger holiday demand, higher productivity and efficiency, new product and service rollouts, and a favorable inflation environment.
Looking ahead, business confidence remained positive but eased from earlier highs. The quarter-ahead CI declined to 23.7 percent from 49.5 percent previously, while the year-ahead CI slipped to 40.4 percent from 48.1 percent.
Businesses cited the lingering impact of recent natural calamities and corruption issues as weighing on future sentiment.
For the fifth consecutive quarter, firms also expect inflation to remain within target, reinforcing signs that inflation expectations across the economy are stable.
Taken together, the latest and prior survey results point to resilient business activity supporting near-term growth, even as households remain cautious.
With both consumers and firms expecting inflation to stay within target, the CES and BES—long-running BSP surveillance tools—continue to provide key inputs for monetary policy decisions aimed at sustaining growth while safeguarding price stability.
