Philippine businesses were cautiously optimistic about the economy in the second quarter . They were primarily concerned about the potential impact of reciprocal tariffs on Philippine exports to the United States and uncertainty over their implementation.

The expected slowdown in business activity after the May midterm elections and the sugar off-milling season also weighed on business confidence.

Results of the latest Business Expectations Survey (BES) of the Bangko Sentral ng Pilipinas (BSP) showed that the overall business confidence index (CI) decreased from 31.2 percent in the first quarter of 2025 to 28.8 percent in the second quarter.

A positive CI means more respondents are optimistic than pessimistic.

Looking ahead, business confidence for the next quarter and next 12 months moderated, with CIs at 39.3 percent and 51.0 percent, respectively, both lower from their quarter-ago and year-ago levels.

Nevertheless, CIs for the next quarter and next 12 months remained positive, reflecting businesses’ continued optimism about near-term economic prospects.

Firms also expect inflation over the next 12 months to stay within the National Government’s target range, indicating well-anchored business inflation expectations. Within-target inflation supports investments and job creation. Bangko Sentral ng Pilipinas