BUSINESS CONFIDENCE fell to <\/span>its weakest in greater than 25 years in March as firms turned pessi<\/span>mistic on expectations that higher fuel costs from the Middle East conflict would curb consumer spending, a central bank survey <\/span>showed.<\/p>\n Results of the Bangko Sentral ng Pilipinas\u2019 (BSP) monthly business expectations survey (BES) showed the current-month confidence index (CI) plunged to -24.3% from 8.2% in February.<\/p>\n A negative CI shows that more respondents are pessimistic than optimistic.<\/p>\n The March CI was the weakest in greater than 25 years or because the -32.6% recorded within the fourth quarter of 2001.<\/p>\n \u201cFirms attributed their pessimism in March 2026 to the continuing Middle East conflict, which had led to a pointy increase in domestic pump prices. Businesses consequently expect consumer spending to slow, as higher fuel costs are seen to feed into the costs of other basic goods and services,\u201d the BSP said.<\/p>\n The business outlook for the second quarter also turned pessimistic, while firms grew less optimistic for the remaining of the yr.<\/p>\n Based on the survey, the three-month ahead CI declined to -17.3% from 37.4% previously. Then again, the year-ahead CI slid to 11.7% from 51.1%.<\/span><\/p>\n \u201cRespondents\u2019 outlook for each periods weakened on expectations that the opposed economic impact of the continuing Middle East con<\/span>flict may persist,\u201d the BSP said.<\/span><\/p>\n Iran effectively closed the Strait of Hormuz after the US-Israeli war with Iran began on Feb. 28. This disrupted global energy markets, sending crude prices soaring and impacting import-reliant economies similar to the Philippines.<\/span><\/p>\n The BSP survey showed firms expect tighter money position and credit access, because the financial condition index turned more negative to -24.9% in March from -15.2% in February. The credit access index also turned negative to -7.1% from 4% within the previous month.<\/span><\/p>\n Financial condition refers to a firm\u2019s general money position considering the extent of money and other money items and repayment terms on loans, while credit access refers back to the environment external to the firm, similar to the supply of credit within the banking system and <\/span>other financial institutions.<\/span><\/p>\n Meanwhile, businesses within the industry and construction sectors reported higher average capability utilization at 73.1% in March from 67.2% in February.<\/p>\n Firms within the electricity, gas, and water subsector also saw an uptick in activity initially of the summer season.<\/p>\n \u201cBusinesses cited stiff domestic competition, insufficient demand, and high rates of interest as major constraints to their business activities. Additionally they cited the impact of oil price hikes, stemming from the continuing Middle East conflict, as an emerging business constraint attributable to higher <\/span>production cost,\u201d the BSP said.<\/span><\/p>\n The survey also showed firms\u2019 employment outlook indices turned negative to -0.1% for June from 27.2% previously. For the yr ahead, the hiring outlook fell to 10% from 30% previously.<\/p>\n Nevertheless, businesses still see room for expansion because the share of industry firms with expansion plans for June and the subsequent 12 months increased.<\/p>\n \u201cDespite prevailing uncertainties, some corporations indicated that they might proceed with their expansion plans, as these were already within the pipeline even before the Middle East conflict began,\u201d the BSP said.<\/p>\n Firms also expect the peso to depreciate within the second quarter and over the subsequent 12 months. Respondents anticipated the local unit to average P59.60 in June, and P60 over the subsequent 12 months.<\/p>\n On Friday, the local unit closed at P60.70 against the dollar, weakening by 22 centavos from its P60.48 finish on Thursday, Bankers Association of the Philippines data showed.<\/p>\n Businesses also expect peso borrowing rates to extend moving forward, while business inflation expectations rose.<\/p>\n More businesses expected inflation to average 2.8% in March, and anticipate inflation to average 3.1% in <\/span>June and three.3% in the subsequent 12 months.<\/span><\/p>\n In March, headline inflation rose to a near two-year high of 4.1%. <\/span><\/p>\n The central bank now expects inflation to average 6.3% this yr and 4.3% next yr, each above its 4% ceiling, before returning to its tolerance range in 2028.<\/p>\n The BSP\u2019s March BES covered 515 firms and was conducted from March 5 to 31.<\/p>\n Q1 CONSUMER CONFIDENCE The BSP said the primary quarter <\/span>consumer expectation survey\u00a0 <\/span>was conducted from Jan. 22 to Feb. 5, before the US-Israeli war on Iran began.<\/p>\n The survey showed that the current-quarter CI turned less negative to -15.8% in the primary quarter, from -22.2% within the fourth quarter of 2025. This implies there was a much bigger drop within the share of pessimistic respondents than within the <\/span>share of optimistic respondents. <\/span><\/p>\n \u201cRespondents were less pessimistic in Q1 2026 as they expect: higher earnings, stable jobs, latest income sources, and more members of the family joining the workforce,\u201d it said.<\/span><\/p>\n For the quarter ahead, the CI slipped to 1.8% from 3.6% previously. For the yr ahead, the CI also dropped to 9.6% in the primary quarter from 11.8% previously.<\/p>\n \u201cThe less upbeat outlook of consumers for each periods reflected concerns over graft and corruption in the federal government, higher inflation, and ineffective government policies and programs,\u201d the BSP said.<\/span><\/p>\n Consumer confidence also improved across different income groups.<\/span><\/p>\n For the April-to-June period, the outlook was still pessimistic among the many low-income group but softened among the many middle-income and high-income groups.<\/p>\n Nevertheless, the outlook for the subsequent 12 months became less optimistic among the many low-income and middle-income groups. \u2014 Aaron Michael C. Sy <\/b><\/p>\n<\/p><\/div>\n <\/p>\n","protected":false},"excerpt":{"rendered":" HIGH-RISE OFFICE and residential buildings dominate the skyline of the central business district in Taguig. \u2014 PHILIPPINE STAR\/RYAN BALDEMOR BUSINESS CONFIDENCE fell to its weakest in greater than 25 years in March as firms turned pessimistic on expectations that higher fuel costs from the Middle East conflict would curb consumer spending, a central bank survey […]<\/p>\n","protected":false},"author":1,"featured_media":325338,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[683,7824,8051,1901,19545,1303],"class_list":["post-325337","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-business","tag-confidence","tag-march","tag-philippine","tag-weakest","tag-years"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/325337","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/comments?post=325337"}],"version-history":[{"count":2,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/325337\/revisions"}],"predecessor-version":[{"id":325340,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/325337\/revisions\/325340"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/media\/325338"}],"wp:attachment":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/media?parent=325337"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/categories?post=325337"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/tags?post=325337"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.bworldonline.com\/wp-content\/uploads\/2026\/04\/260427Business_Expectations-1024x1022.jpg\")
<\/p>\n
<\/b>Meanwhile, consumer confidence <\/span>improved in the primary quarter, <\/span>\u201cre<\/span>flecting conditions prior to the onset of the Middle East conflict,\u201d the BSP said.<\/span><\/p>\n