By Benjamin Cuaresma
MANILA — Business sentiment in the Philippines swung into negative territory in July as renewed tensions in the Middle East fueled concerns over higher oil prices and continued inflationary pressures, according to the Bangko Sentral ng Pilipinas (BSP).
The BSP said Friday that the overall confidence index (CI) in its latest Business Expectations Survey (BES) fell to -20.3 in July from 0.0 in June, indicating that more businesses held a pessimistic outlook than an optimistic one.
The reversal came as firms assessed the potential impact of geopolitical tensions, rising energy costs and persistent inflation on economic activity.
Despite the deterioration in current business sentiment, companies remained positive about their prospects over the next 12 months, although optimism was weaker compared with the previous survey.
The central bank said firms expected economic activity to moderate and inflation to remain above the BSP’s 4% tolerance ceiling.
“Over the next 12 months, fewer firms indicated plans to hire additional workers amid expectations of softer growth and elevated inflation,” the BSP said.
The industry sector, however, continued to report plans to expand operations in the coming year.
The BSP said it was closely monitoring developments in the Middle East and their possible effects on business and consumer confidence, household and corporate spending, and investment decisions.
The central bank considers business and consumer sentiment among the indicators used in formulating monetary policy.
The July 2026 Business Expectations Survey was conducted from July 7 to 31 and covered 506 firms nationwide. Of these, 193 were based in the National Capital Region and 313 were located outside the NCR, representing all 18 regions.
The survey used stratified random sampling from a database of the country’s top 7,000 corporations based on total assets in 2017.
The nationwide response rate was 48.8%, with a reported sampling error margin of ±6.1%.
ia/xf
