Philippine businesses showed little optimism in the third quarter of this year due to softer demand, but sentiment perked up in the fourth quarter on the back of a seasonal rise around the year-end holidays, the central bank’s latest surveys said.
Consumers, on the other hand, were more upbeat than the business sector in the third quarter all the way to the last three months of the year on expectations of higher earnings and stable jobs.
The Bangko Sentral ng Pilipinas’ (BSP) Q3 Business Expectations Survey (BES) — released on Friday — said the rainy and typhoon season, as well as the “ghost month” of August, contributed to subdued demand.
“Global headwinds, such as higher US tariffs, geopolitical tensions, and weaker foreign demand, also weighed on business confidence,” the BSP said.
The BES, one of the central bank’s economic surveillance tools, indicated an overall business confidence index (CI) of 23.2 percent in the third quarter, lower compared with the previous survey that showed 28.8 percent.
For the fourth quarter, or October to December, the CI improved to 49.5 percent from 39.3 percent in the second quarter BES, due to seasonal factors.
The more optimistic outlook in the fourth quarter was due to higher consumer holiday spending, companies’ expansion plans and low inflation.
The BSP said the outlook for the next 12 months, however, declined to 48.1 percent in the third quarter from 50 percent in the previous BES.
Businesses attributed the downbeat year-ahead CI to lower demand for goods and services after the Christmas season, as well as the impact of higher US tariffs and geopolitical conflict.
Less gloomy consumer outlook
The BSP’s Q3 Consumer Expectations Survey (CES), another monitoring tool to help the BSP in its monetary policy, noted Filipino consumers’ less pessimistic sentiment for the third quarter due to prospects of new income sources, more jobs, higher earnings and more working family members.
Based on the CES, the overall CI —though still negative — was less so at -9.8 percent in the third quarter from -14 percent in the second quarter.
The BSP said households expect continued higher income, more working opportunities and stable inflation in the fourth quarter and in the next 12 months.
For the last quarter of 2025, the CI increased to 6.9 percent in the latest survey from 0.6 percent in the second quarter survey.
In the next 12 months, the CI also improved to 14.1 percent from 11.8 percent.
The central bank conducted the BES from July 4 to August 17, 2025. The survey covered 1,523 firms nationwide, of which 580 were located in the national capital region (NCR) and 943 were outside the NCR.
In the CES data culled from July 1 to 12, 2025, about 5,493 households participated, with 45.1 percent from the NCR and 54.9 percent from the provinces.
