Philippine business confidence turns negative in July

By Francis Allan L. Angelo

Philippine business sentiment turned pessimistic in July 2026 as renewed tensions in the Middle East, higher oil prices and persistent inflationary pressures weighed on companies’ outlook.

The Bangko Sentral ng Pilipinas said the overall confidence index in its latest Business Expectations Survey fell to -20.3 percent in July from a neutral 0.0 percent in June.

A negative confidence index means pessimistic respondents outnumber those who are optimistic about the economy, while a positive reading indicates the opposite.

Companies’ confidence index for the next three months dropped to 3.7 percent in July from 18.8 percent in the June survey.

The confidence index for the next 12 months also declined to 29.4 percent from 42.4 percent.

Despite the lower readings, companies remained optimistic about business prospects over the coming year, although their confidence was weaker than in the previous survey.

Businesses expect economic activity to moderate and inflation to remain above the BSP’s 4-percent tolerance ceiling.

Fewer companies indicated plans to hire additional workers over the next 12 months amid expectations of slower growth and elevated inflation.

Companies in the industry sector, however, continued to report plans to expand their operations next year.

The BSP said it continues to monitor the economic implications of developments in the Middle East, particularly their effects on business and consumer sentiment.

The central bank is also assessing how these developments could influence household and corporate spending and investment decisions.

Business and consumer sentiment are among the indicators considered by the BSP when setting monetary policy.

The July 2026 survey was conducted from July 7 to 31 and covered 506 companies nationwide.

The respondents included 193 companies in the National Capital Region and 313 firms outside the NCR.

The survey covered all 18 regions of the Philippines.

Samples were selected through stratified random sampling from the Bureau van Dijk database of the Top 7,000 Corporations based on total assets in 2017.

The nationwide response rate was 48.8 percent, with a sampling error margin of plus or minus 6.1 percent.