Philippines Business Confidence Plunges on Middle East Tensions and Oil Prices
Business sentiment in the Philippines took a hit in July as concerns about renewed tensions in the Middle East, higher oil prices, and persistent inflationary pressures weighed on the economy. The Bangko Sentral ng Pilipinas (BSP) released its July 2026 Business Expectations Survey, which showed that the overall business confidence index fell to -20.3 from zero in June.
This marked a return to pessimism after businesses had been evenly split between optimistic and pessimistic views a month earlier. The survey identified renewed tensions in the Middle East as the biggest reason for the weaker outlook, accounting for 19.8 percent of negative responses.
Higher oil prices amid disruptions in fuel shipments through the Strait of Hormuz accounted for 15.1 percent, while persistent inflationary pressures accounted for 11.3 percent. Firms' assessments of their own operations also reflected the weaker sentiment, with the current-month business activity index slipping to -0.1 from 8.3.
The survey data showed that financial conditions deteriorated further, with the financial condition index declining to -31.4 from -26.8, while the credit access index fell to -7.0 from -5.7. Average capacity utilization in the industry and construction sectors dropped to 68.6 percent from 73.9 percent in June.