Filipino consumers have become less optimistic about the near-term and 12-month economic outlook, even as sentiment improved in the first quarter of 2026, according to the Bangko Sentral ng Pilipinas (BSP).
Declining Confidence Indices
The central bank's Consumer Expectations Survey revealed that the confidence index for the next quarter (Q2 2026) dropped to 1.8 percent from 3.6 percent in the previous survey. Meanwhile, the outlook for the next 12 months eased to 9.6 percent from 11.8 percent. These declines reflect growing concerns over higher inflation, governance issues, and perceived policy inefficiencies.
Improved Current Quarter Sentiment
Despite the softer outlook, consumer sentiment for the current quarter improved significantly. The confidence index rose to -15.8 percent in Q1 2026 from -22.2 percent in the preceding quarter, indicating fewer pessimistic households. Households attributed this improvement to expectations of higher earnings, stable employment, additional income sources, and more working family members.
Inflation and Economic Concerns
Consumers still anticipate rising inflation, interest rates, and unemployment, as well as a weaker peso in the coming months. The year-ahead inflation forecast edged up to 2.7 percent, which remains within the BSP's target band. Spending sentiment weakened, with the outlook for goods and services slipping to 40.3 percent from 43.7 percent, reflecting caution across major expense categories such as food, transport, and housing.
Strengthening Saving Sentiment
In contrast, saving sentiment strengthened, as the saving index climbed to 12.4 percent from 4.6 percent. This suggests that households are bracing for potential economic headwinds by increasing their savings. The survey, conducted from January 22 to February 5, covered 5,358 households nationwide and captured sentiment before the recent escalation of Middle East tensions.
