Philippine businesses turned more optimistic in the fourth quarter of 2025, buoyed largely by expectations of stronger consumer spending during the holiday season.

Results of the Bangko Sentral ng Pilipinas’ (BSP) latest Business Expectations Survey (BES) showed that the overall business confidence index (CI) rose to 29.7 percent in Q4 2025, up from 23.2 percent in the previous quarter. A positive CI indicates that more firms are optimistic than pessimistic about economic conditions.

Apart from higher holiday spending, respondents cited improved productivity and operational efficiency, the rollout of new products and services, and a favorable inflation environment as key factors supporting business sentiment during the quarter.

Business outlook for the next quarter and the next 12 months remained positive but showed a notable decline. The confidence index for Q1 2026 slipped to 23.7 percent from 49.5 percent previously, while the year-ahead CI eased to 40.4 percent from 48.1 percent.

Firms pointed to the lingering effects of recent natural calamities and the dampening impact of corruption allegations on investor and business confidence as factors weighing on the outlook for the coming periods.

Meanwhile, for the fifth straight quarter, businesses expect inflation over the next 12 months to remain within the National Government’s target range, signaling well-anchored inflation expectations. Within-target inflation is seen as supportive of investments and job generation.

The BSP said the BES remains a key economic surveillance tool, with its results serving as important inputs in the formulation of monetary policy.