Business sentiment turned more upbeat in February, with companies expressing greater confidence in the Philippine economy over the coming months and into 2026, according to the latest Business Expectations Survey of the Bangko Sentral ng Pilipinas.
The survey showed that the year-ahead confidence index climbed sharply to 51.1 percent in February from 38.6 percent in January, signaling a more bullish outlook among firms. Businesses pointed to expectations of steady consumer spending, higher public infrastructure outlays, and continuing governance reforms as key factors that could help sustain economic growth this year.
Confidence in the near term also improved. The quarter-ahead confidence index rose to 37.4 percent from 33.3 percent in the previous survey, as firms looked to favorable weather conditions and the usual surge in summer-related demand to support business activity. Companies also expect government spending to accelerate, alongside a recovery in investor confidence.
The stronger outlook was also reflected in employment prospects, with hiring intentions for both the next quarter and the year ahead showing improvement. This suggests that businesses continue to see labor market conditions remaining resilient through 2026.
At the same time, firms were more measured when it came to expansion plans, particularly in the industry sector, where fewer respondents signaled plans to grow operations. While some businesses remained optimistic about near-term opportunities, others appeared to be taking a more cautious stance on longer-term investments.
Inflation expectations, meanwhile, remained well anchored. Businesses said their average inflation outlook for both the quarter ahead and the year ahead stayed below the BSP’s 3 percent target for 2026, while still remaining within the central bank’s plus-or-minus 1 percentage point tolerance band.
The BSP noted, however, that the February 2026 survey was conducted before the outbreak of the recent Middle East conflict. As a result, the durability of the improvement in business confidence and the stability of inflation expectations may still depend on how long the conflict persists and how deeply it affects the domestic economy.
The central bank said the monthly Business Expectations Survey serves as a more timely gauge of sentiment in the business sector, giving policymakers a more frequent reading of confidence trends and helping them respond more quickly to shifting domestic and global conditions.