Businesses less upbeat in Q1 — BSP

The country’s business sector was less optimistic about the Philippine economy in the first quarter of 2025 amid post-holiday demand decrease and inflationary concerns, the Bangko Sentral ng Pilipinas (BSP) said Friday.

According to the results of the BSP’s Business Expectations Survey (BES), business confidence in the economy weakened as the overall confidence index (CI) dropped to 31.2% in the first quarter of 2025 from 44.5% in the last quarter of 2024.

“This decline reflects a combination of a decreased percentage of optimists and an increased percentage of pessimists,” the central bank said.

The firms' less upbeat sentiment in the first three months of the year was primarily driven by concerns regarding the post-holiday decline in demand for goods and services, along with a slowdown in business activities, and a potential resurgence of inflationary pressures.

“The business sentiment for Q1 2025 was generally less optimistic across all sectors, except for the construction sector, whose optimism was little changed,” the BSP said.

For the second quarter of 2025, the latest BES showed that firms are more upbeat with the overall CI increasing to 45.4% from 40.3% in the last quarter of 2024’ survey results.

“For the next 12 months, the business outlook remained buoyant, with the overall CI holding steady at 56.4%, unchanged from the fourth quarter 2024 survey round,” the central bank said.

The latest BES also showed that firms are anticipating that the inflation rate may rise in the first half of 2025, as well as over the next 12 months.

Firms are expecting that the inflation rate may average 3.2% in the first quarter, 3.3% in the second quarter, and 3.4% over the next 12 months.

“All of these inflation expectations fall within the National Government’s inflation target range of 2% to 4% for 2025-2026,” the BSP said.

The latest BES was conducted during January 8, 2025 to March 1, 2025, in which 1,527 firms were surveyed nationwide —consisting of 582 companies in the NCR and 945 firms in areas outside Metro Manila, covering all 17 regions nationwide.

Samples were drawn through stratified random sampling from the Bureau van Dijk (BvD) database of Top 7,000 Corporations based on total assets in 2017, according to the BSP. — RSJ, GMA Integrated News