Consumer confidence sinks on rising prices as business sentiment improves — BSP survey

Filipino consumers grew more pessimistic in the second quarter due to rising food and fuel prices, while businesses became more optimistic in May on expectations of stronger consumer spending and higher earnings, survey results by the Bangko Sentral ng Pilipinas (BSP) on Friday showed.

The BSP’s Consumer Expectations Survey (CES) showed that the overall Consumer Confidence Index (CI) dropped further to -42.0% in the second quarter from -15.8% in the previous quarter.

A negative CI means there are more respondents with a negative outlook than a positive outlook.

“Aside from concerns over higher fuel and food prices, governance-related issues also weighed on consumer sentiment,” the BSP said in an emailed statement.

The Philippines, a net importer of fuel, has been largely affected by the spike in global oil prices brought about by the conflict in the Middle East. Inflation was recorded at 6.8% in May, higher than the government’s 2.0% to 4.0% target range.

“Consumers also anticipated higher spending on essential goods and services but were less inclinced to purchase big-ticket items such as motor vehicles and real properties,” the BSP said.

“Households are also less likely to borrow and save, reflecting a more guarded outlook on their finances,” it added.

Data released by the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and the Truck Manufacturers Association (TMA) showed that there were 33,532 units sold in May, higher than the 27,089 in April, but 15.7% lower than the 39,775 in May 2025.

The Consumer CI for the next quarter also turned sour as it declined to -16.3% from 1.8% in the previous survey period. A drop was also recorded in the CI for the next 12 months, down to 0.2% from 9.6%.

The second-quarter CES was conducted from April 6 to 18, 2026, with responses collected from 5,503 households across the country. The response rate was recorded at 98.4%, with a sampling error margin of ±1.3%.

Meanwhile, results of the Business Expectations Survey (BES) showed that business sentiment improved, albeit still on negative territory, to -25.2% in May from -35.8% in April.

The central bank said companies attributed the improvement to expectations that consumer spending will pick up to support corporate earnings.

The overall Business CI for the next three months also improved to 0.6% from -7.5%, and to 27.8% from 19.5% for the next 12 months.

“Firms also reported that they intend to hire more workers over the next three and 12 months as they expect business activities to increase over the same period. However, the share of industry firms intending to expand operations declined amid continued uncertainty,” the BSP said.

“Businesses expect inflation to remain elevated over the next 12 months and to stay above the BSP’s 4-percent tolerance ceiling,” it added.

The May BES was conducted from May 5 to 31, 2026, with 502 firms surveyed across the country. The response rate stood at 44.8%, with a sampling error margin of ±6.4%. — RSJ, GMA News