Business Confidence Improves as Firms Expect Favorable Corporate Earnings and Lower Oil Prices

Philippine business sentiment improved in May on expectations that consumer spending will pick up to support corporate earnings. Businesses were also more optimistic for the next 12 months, anticipating that fuel prices would decline and tensions in the Middle East would be resolved. This resonates with firms’ favorable economic outlook over the three- and 12-month horizons. They, likewise, expect a recovery in investor confidence over the period.

Firms also reported that they intend to hire more workers over the next three and 12 months as they expect business activities to increase over the same period. However, the share of industry firms intending to expand operations declined amid continued uncertainty.

Businesses expect inflation to remain elevated over the next 12 months and to stay above the BSP’s 4-percent tolerance ceiling.

Overall, firms’ confidence index (CI) improved based on the latest monthly Business Expectations Survey (BES) of the Bangko Sentral ng Pilipinas (BSP).

Overall Business CI (%)
Survey Period	Current Month	3 Months from Now	12 Months from Now
April 2026	-35.8	-7.5	19.5
May 2026	-25.2	0.6	27.8
Note: A positive (negative) CI means more respondents are optimistic (pessimistic) than pessimistic (optimistic) about the economy.

The BSP continues to closely monitor the impact of the Middle East conflict on domestic prices, broader economy, and consumer and business expectations. The shift to a monthly BES in January 2026 provides a timelier assessment of business confidence and enables the BSP to respond more proactively to evolving domestic and global developments.

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^[1] The May 2026 BES was conducted from 5 to 31 May 2026. There were 502 firms surveyed nationwide, consisting of 196 companies in the National Capital Region (NCR) and 306 firms in areas outside the NCR, covering all 18 regions across the country. Samples were drawn through stratified random sampling from the Bureau van Dijk (BvD) database of Top 7,000 Corporations based on total assets in 2017. The nationwide survey response rate for May 2026 was 44.8 percent with a sampling error margin of ±6.4 percent.