Businesses less upbeat, consumers more bullish

For first quarter OF 2025

MANILA, Philippines — Businesses in the Philippines turned less optimistic for the first quarter next year and the next 12 months amid economic uncertainties leading up to the midterm elections, according to the Bangko Sentral ng Pilipinas (BSP).

On the other hand, consumers turned more upbeat for the first quarter of 2025 and the next 12 months on expectations of higher income and more available jobs.

Based on the fourth quarter 2024 Business Expectations Survey (BES) of the BSP, the overall confidence index declined to 40.3 percent compared to a quarter-ago level of 56.8 percent.

The central bank attributed the respondents’ less optimistic outlook for the quarter to the post-holiday decline in demand for products and services and business activities as well as stiff foreign and domestic competition.

Firms were also less optimistic amid increased economic uncertainty leading up to the midterm elections, the peso’s depreciation against the dollar and higher costs of production.

Business sentiment was also less optimistic for the next 12 months, with the overall confidence index decreasing to 56.4 percent from the previous quarter’s survey result of 58 percent.

The respondents’ less upbeat outlook for the next 12 months was due to concerns over weaker demand for products and services, economic impact of escalating geopolitical tensions, stiff domestic and foreign competition as well as the possibility of inflation picking up again.

From October to December, the overall business confidence index increased to 44.5 percent from 32.9 percent, driven by firms’ anticipation of higher demand for goods and services as well as the seasonal uptick in business activities.

The BSP said that this could lead to increased demand in agricultural products, infrastructure projects, shipping and distribution services, transportation units, enrollment, chemicals and graphics services, among others.

“Moreover, the expected easing of inflation and lower interest rates as well as the expansion and improvement of business operations buoyed business sentiment,” the BSP said.

On the other hand, the central bank reported that consumer sentiment turned more upbeat for the first quarter of 2025, with the overall confidence index increasing to 4.2 percent from 0.7 percent.

The consumer confidence index for the next 12 months also went up to 12.4 percent from the previous quarter’s 9.9 percent.

“The more upbeat outlook of consumers for both periods was attributed to expectations of higher income, additional sources of income and more available jobs,” the BSP said.

The consumer sentiment in the fourth quarter based on the fourth quarter 2024 Consumer Expectations Survey (CES) was also less pessimistic, with the overall confidence index improving to -11.1 percent from -15.6 percent in the third quarter.

This was due to expectations of higher and additional sources of income, more working family members as well as more available jobs and permanent employment.

The BES was conducted from Oct. 4 to Nov. 14 covering 1,525 companies, while the CES covered 5,470 respondents from Oct. 4 to 16.