The Central Bank of the Philippines published its Q1 2025 Business Expectations Survey, showing business sentiment was less optimistic, with the overall confidence index (CI) falling to 31.2 percent from 44.5 percent in Q4 2024. The weaker outlook reflected fewer optimists and more pessimists, driven mainly by expectations of post-holiday demand softening and concerns about a potential resurgence of inflationary pressures, while sentiment improved for Q2 2025 (CI 45.4 percent) and stayed buoyant for the next 12 months (CI 56.4 percent). Optimism eased across sectors in Q1 2025, with construction the only sector little changed, and confidence was generally lower across exporters, dual-activity firms and domestic-oriented firms, while importers were broadly steady. Average capacity utilisation in industry and construction declined to 71.4 percent from 73.9 percent. Firms also expected tighter liquidity and tighter credit access, alongside peso depreciation against the USD and higher peso borrowing rates in the first half of 2025. Inflation expectations strengthened across all horizons, with firms projecting average inflation of 3.2 percent in Q1 2025, 3.3 percent in Q2 2025 and 3.4 percent over the next 12 months, all within the National Government’s 2.0–4.0 percent target range for 2025–2026. The survey was conducted from 8 January to 1 March 2025 and covered 1,527 firms nationwide, with a 61.3 percent response rate.

Original source View in tracker