BSP launches monthly survey to track business confidence

The Bangko Sentral ng Pilipinas has launched a monthly Business Expectations Survey and released results from its inaugural January 2026 round, aiming to track business sentiment more frequently than the previous quarterly schedule.

The central bank said the shift from quarterly to monthly surveying is intended to help it monitor business confidence more closely and respond more effectively to rapidly changing domestic and external developments.

In January 2026, the survey’s current-month Confidence Index stayed positive at 0.9%, meaning optimists narrowly outnumbered pessimists, the BSP said.

That 0.9% reading was lower than the 29.7% recorded in the fourth quarter of 2025, even as forward-looking indicators improved, with the three-month-ahead Confidence Index at 33.3% and the year-ahead Confidence Index at 38.6%.

The BSP said January’s continued positive outlook was supported by expectations of higher consumer demand and enhancements in business processes.

It said business confidence for the next quarter and the next 12 months was lifted by expectations of stronger consumer demand and sales, improved domestic economic conditions, and more favorable investment prospects.

The January 2026 report also showed firms expected tighter conditions in their cash position and credit access, with a financial condition index of -19.2% and a credit access index of -0.6%.

Average capacity utilization for responding firms in the industry and construction sectors was 69.6% in January 2026.

On firms’ own-operations measures for the current month, the volume of business activity index was 3.5 and the volume of total order book index was -0.1.

Surveyed firms identified domestic competition as the most-cited constraint at 62.2%, followed by insufficient demand at 39.7% and high interest rates at 21.6%.

Other cited constraints included “others” at 28.9%, unclear economic laws at 18.7%, financial problems at 18.7%, labor problems at 10.0%, access to credit at 8.4%, lack of equipment at 6.0%, lack of materials input at 5.9%, and “none” at 6.1%.

Hiring intentions were positive for April 2026 and for the next 12 months, with employment outlook indices of 11.3% and 23.3%, respectively.

The report showed the volume of business activity index rising to 39.1 for the three-month-ahead horizon and to 45.5 for the next 12 months.

In the industry sector, the share of firms reporting expansion plans was 14.1% for April 2026 and 24.3% for the next 12 months.

Firms also expected the Philippine peso to depreciate against the U.S. dollar, with exchange rate expectations averaging PHP 58.88 per USD 1 for January 2026 and April 2026, and PHP 58.99 per USD 1 over the next 12 months.

On the expectations indices for the peso-dollar exchange rate, the report posted readings of -24.3 for the current month, -7.3 for three months ahead, and -2.9 for the next 12 months.

Businesses expected peso borrowing rates to ease in January 2026 but rise in April 2026 and over the next 12 months, with peso borrowing rate indices of -6.3 for the current month, 3.8 for three months ahead, and 2.8 for the next 12 months.

Inflation expectations were described as well-anchored, with firms projecting inflation averages of 2.2% in January 2026, 2.4% in April 2026, and 2.6% over the next 12 months.

Those expectations were below the BSP’s 3.0% inflation target for 2026 and within the stated tolerance band of plus-or-minus 1.0 percentage point around the target.

The statistical tables also break out Confidence Index results by geography, showing the current-month Confidence Index at -8.0 for the National Capital Region and 20.6 for areas outside the NCR.

For the three-month-ahead horizon, the Confidence Index was 35.3 for the NCR and 28.8 for areas outside the NCR, while the year-ahead Confidence Index was 35.9 for the NCR and 44.3 for areas outside the NCR.

By sector, the distribution of respondent firms totaled 244, with 66 in industry, 15 in construction, 54 in wholesale and retail trade, and 109 in services.

By trading group for the current month, the Confidence Index was 19.2 for importers, 11.1 for exporters, -8.0 for firms that were both importers and exporters, and 11.2 for “not specified.”

The number of respondents by trading group totaled 244, including 26 importers, nine exporters, 25 firms that were both importers and exporters, 170 domestic-oriented firms, and 14 “not specified.”

The report’s percentage distribution by trading group was 10.7% importers, 3.7% exporters, 10.2% both importers and exporters, 69.7% domestic-oriented, and 5.7% not specified, totaling 100.0%.

For the three-month-ahead outlook by trading group, the Confidence Index was 57.7 for importers, 22.2 for exporters, 32.0 for firms that were both importers and exporters, and 27.6 for domestic-oriented firms.

For the year-ahead outlook by trading group, the Confidence Index was 42.31 for importers, 33.3 for exporters, 48.0 for firms that were both importers and exporters, and 43.5 for domestic-oriented firms.

By employment size for the current month, the Confidence Index was 10.9 for small firms with fewer than 100 employees, 14.5 for medium firms with 100 to fewer than 500 employees, and 6.1 for large firms with 500 employees and up.

The number of respondents by employment size totaled 244, including 110 small firms, 83 medium firms, 33 large firms, and 18 not specified.

The percentage distribution by employment size was 45.1% small, 34.0% medium, 13.5% large, and 7.4% not specified, totaling 100.0%.

For the three-month-ahead outlook by employment size, the Confidence Index was 27.3 for small firms, 37.3 for medium firms, and 33.3 for large firms.

For the year-ahead outlook by employment size, the Confidence Index was 40.0 for small firms, 44.6 for medium firms, and 57.6 for large firms.

The report listed the distribution of sampled firms by geographic area—within the respondents—at 244 total, including 82 from the NCR and 162 from areas outside the NCR.

In describing how the survey is calculated, the BSP said the Confidence Index represents the percentage of firms answering in the affirmative minus the percentage answering in the negative on the overall business outlook, while related indices for financial condition and access to credit reflect the balance of firms expecting “easy” conditions versus “tight.”

The BSP said it computes expectations on key economic indicators as the percentage of firms answering “up” minus those answering “down,” noting that the interpretation differs for the inflation rate and peso-borrowing rate, where a positive index indicates the opposite direction.

The central bank said the monthly BES uses the same sampling frame and questionnaire as the quarterly round, with minor wording adjustments to reflect the reference period.

It said each monthly round now covers about 500 firms nationwide—about one-third of the previous quarterly coverage of around 1,500—which increases the nationwide margin of error from about 3.0% to around 6.0% but keeps it within the acceptable 5.0–7.5 range for enterprise surveys.

For January 2026, the BSP said the survey was conducted from Jan. 9–31, 2026, with 507 firms surveyed nationwide, including 193 companies in the NCR and 314 firms outside the NCR across all 18 regions.

It said samples were drawn through stratified random sampling from the Bureau van Dijk database of the Top 7,000 corporations based on total assets in 2017.

The nationwide survey response rate for January 2026 was 48.1%, with a sampling error margin of plus-or-minus 6.2 percentage points.

The BSP said the move to monthly fielding aligns with its broader efforts to enhance and expand its macroeconomic surveillance toolkit, and it noted that BES results are intended to provide an advance indication of the direction of change in overall business activity and related indicators.