Consumer confidence improves in Q3 2025 across regions

Filipino consumers were less pessimistic in the third quarter of 2025, citing new income sources, higher earnings, stable jobs, and more working family members as key reasons for their improved outlook.

The Bangko Sentral ng Pilipinas reported that the overall consumer confidence index (CI) rose to -9.8 percent in Q3 2025 from -14.0 percent in Q2 2025, marking the least negative reading since the fourth quarter of 2023.

A negative CI means more consumers remain pessimistic than optimistic, but the easing trend reflects improving household expectations.

“The higher CI reflects a combined increase in the percentage of optimists and a decrease in the percentage of pessimists,” the BSP said in its Q3 2025 Consumer Expectations Survey (CES).

This sentiment shift was driven by expectations of new income streams, rising wages, job stability, and growing employment opportunities nationwide.

Consumer confidence for the next quarter (Q4 2025) improved to 6.9 percent from 0.6 percent in the previous quarter, while confidence for the next 12 months rose to 14.1 percent from 11.8 percent.

Respondents linked the more optimistic outlook to anticipated higher incomes, additional earnings, more job openings, and stable prices of goods and services.

Sentiment by income group showed that middle- and high-income households were less pessimistic in the current quarter, while optimism was more broadly shared across all groups for the next quarter.

In the 12-month outlook, both low- and high-income groups were more upbeat, but the middle-income group remained cautiously steady.

Geographically, confidence rose in both the National Capital Region (NCR) and Areas Outside the NCR (AONCR), with NCR consumers showing improved optimism for the next quarter and the year ahead.

For Q4 2025, NCR sentiment turned positive, while AONCR consumers remained more upbeat compared to the previous quarter.

Spending expectations for Q4 2025 also increased, with the index rising to 40.7 percent from 37.8 percent in Q2 2025, indicating households’ readiness to spend more on goods and services.

Consumers said they expect to spend more on food, beverages, clothing, gas, education, transport, and communications, though sentiment declined for water, electricity, and healthcare.

Sentiment on buying big-ticket items such as homes, vehicles, and durable goods remained pessimistic but improved to -59.3 percent in Q3 2025 from -65.5 percent in Q2 2025—the highest level since Q3 2020.

However, the 12-month outlook for buying big-ticket items slightly worsened, with the index declining to -68.2 percent, as fewer households reported plans to buy residential properties.

The proportion of households planning to acquire real estate dropped to 5.6 percent in Q3 2025 from 6.1 percent in the prior quarter.

Among those with intentions to buy, 53.3 percent aimed for properties priced at PHP 450,000 (USD 7,944.00) or less, while 31.8 percent were eyeing units between PHP 450,001 (USD 7,944.02) and PHP 1,700,000 (USD 29,999.62), and 14.8 percent looked at higher-end options.

Saving intentions improved as the index rose to -8.8 percent in Q3 2025 from -16.1 percent in Q2 2025, signaling better future financial planning among households.
Most households intending to save would allocate less than 10 percent of their income, with this share rising to 76.1 percent from 73.6 percent previously.

The year-ahead inflation expectation eased to 2.6 percent in Q3 2025 from 3.7 percent in Q2 2025, continuing a three-quarter trend of within-target forecasts, aligned with the government’s 2.0 to 4.0 percent inflation target.

Consumers attributed the expected slowdown to easing food inflation, particularly for rice, although concerns lingered over fuel prices and the effectiveness of government price control measures.

Among overseas Filipino worker (OFW) households, 95.4 percent reported spending remittances on food and household needs, while a growing number allocated funds for education, medical bills, and savings.

Meanwhile, fewer OFW families used remittances for debt repayments and motor vehicle purchases, reflecting shifting financial priorities.

Borrowing intentions for the next quarter and year ahead improved slightly, with the index rising to -74.1 percent and -66.2 percent, respectively, indicating gradually loosening credit sentiment.

The CES, conducted July 1–12, 2025, surveyed 5,416 households nationwide, with a 98.6 percent response rate, and serves as a key forward-looking indicator used by the BSP to guide monetary policy.

The report’s significance lies in its role as an early signal of consumer demand conditions, helping policymakers anticipate changes in household spending, borrowing, and inflation expectations that directly affect monetary policy decisions.

It also provides timely insights for businesses, investors, and economic planners by highlighting trends in consumption, savings, and market sentiment that can influence strategic planning in the second half of the year.