Filipino households exhibited improved confidence in the first quarter of 2026, driven by expectations of higher income and stable employment, according to the Bangko Sentral ng Pilipinas (BSP). However, concerns over inflation, corruption, and future economic uncertainty tempered optimism for the months ahead.
Consumer Confidence Index Rises
The BSP’s latest Consumer Expectations Survey (CES) showed the current-quarter confidence index (CI) improved to negative 15.8 percent in Q1 2026 from negative 22.2 percent in Q4 2025. This indicates reduced pessimism among Filipino households. Consumers attributed the improvement to expectations of higher earnings, more stable jobs, additional income sources, and more family members entering the workforce.
Outlook for Coming Quarters Softens
Despite the better first-quarter sentiment, consumers became more cautious for the rest of the year. The quarter-ahead CI fell to 1.8 percent from 3.6 percent, while the year-ahead CI declined to 9.6 percent from 11.8 percent. The softer outlook reflected worries over government graft and corruption, higher inflation, and ineffective public policies and programs.
The survey was conducted from January 22 to February 5, 2026, before the onset of the Middle East conflict. As a result, any impact from rising geopolitical tensions and oil prices may emerge in future survey rounds.
Inflation Expectations Remain Anchored
Inflation expectations stayed relatively well-anchored despite rising concerns. Households’ year-ahead inflation forecast edged up to 2.7 percent from 2.6 percent in the previous quarter, still below the BSP’s 3 percent target for 2026 and within its tolerance range.
The BSP stated that it continues to closely monitor the possible effects of the Middle East conflict on domestic prices and broader economic activity. It added that it stands ready to respond with appropriate monetary policy measures should oil-driven inflationary pressures become more persistent.
The CES, a nationwide quarterly survey of about 5,500 households, serves as one of the BSP’s key surveillance tools in assessing consumer sentiment and shaping monetary policy decisions.
