Business sentiment stayed pessimistic in September 2026, according to the latest Business Expectations Survey released by the Bangko Sentral ng Pilipinas, although confidence readings for the near‑term and year‑ahead outlook remained positive. The current‑month confidence index improved slightly to ‑8.4 percent from ‑10.9 percent in August, still signaling more firms were downbeat about present conditions.
Businesses cited high fuel and energy expenses and broad price increases as the main drivers of weak near‑term sentiment. Additional drag factors included geopolitical tensions in the Middle East, peso depreciation, and supply disruptions caused by bad weather. These pressures have weighed on operating costs for small and large enterprises alike, while also squeezing household purchasing power as higher energy and commodity prices translate to more expensive daily goods.
Even so, survey respondents held a more positive view for the coming months. The three‑month confidence index stood at 20.9 percent, supported by expectations of increased commercial activity during the year‑end holiday season and the upcoming rice harvest period, which typically lifts farm‑related trade and household spending. The 12‑month confidence index came in at 26.5 percent, lower than the previous round’s 36.4 percent but still firmly optimistic, with firms pinning longer‑term hopes on growth prospects in healthcare, education, tourism, financial services, real estate development, and trade.
Survey participants projected inflation would stay above 4.0 percent, the upper limit of the Bangko Sentral’s tolerance band around its 3.0‑percent target. The employment outlook for the next 12 months remained positive but softened compared with the August survey, even as more industrial companies indicated plans to expand operations. Businesses noted potential support for activity from expected slower price gains, simpler administrative requirements, possible easing of Middle East tensions, and improved investor confidence over time.
Central bank officials said they continue to monitor developments in the Middle East and their ripple effects on business and consumer sentiment, spending, and investment. These business‑expectation indicators form part of the data set the Bangko Sentral uses when setting monetary policy, with broader implications for borrowing costs, household budgets, and corporate expansion plans across the Philippine economy.
