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Philippine Business Confidence Falls to Record Low in April

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Philippine Business Confidence Falls to Record Low in April

Philippine business confidence in April declined for the second straight month, driven lower by the Middle East conflict and concerns that higher oil prices could raise business operating costs and erode household purchasing power, Bangko Sentral ng Pilipinas (BSP) reported Friday.

The Philippines Business Expectations Survey business confidence index for April fell to a negative 35.8, down from a negative 24.3 in March, striking a record low in the poll's 25-year history, the central bank reported.

Readings below zero on the confidence index mean more respondents are pessimistic than optimistic about the Philippine economy and business scene.

The March and April business confidence index readings are the first in negative territory since September 2021, the COVID-19 pandemic era.

However, Philippine enterprises were less pessimistic in April than in March in their expectations for the next three and 12 months.

The three-month-ahead business confidence index increased to negative 7.5 from negative 17.3, while the 12-month-ahead index rose to 19.5 from 11.7, reported BSP.

"The outlook improved on expectations of stronger demand, higher sales and income, better economic conditions, and a possible resolution of the Middle East conflict," said the central bank, in a prepared statement.

Philippine businesses in April expected a 4.2% inflation rate over the next 12 months, exceeding the central bank's "4.0% tolerance ceiling," added BSP.

The central bank's business confidence survey was conducted from April 7 to 30, with responses collected from 507 companies across the country.

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