Business confidence had improved sharply in February, prior to the escalation of the Middle East conflict, pointed out the Bangko Sentral ng Pilipinas (BSP).

In a statement, the BSP said its second monthly run of the Business Expectations Survey (BES) showed that overall business confidence index (CI) was rising from 38.6 percent in January 2026 to 51.1 percent in February 2026.

Firms then were citing expectations of stronger demand, increased infrastructure investment and ongoing governance reforms addressing the flood control scandal as key drivers of improved optimism.

The quarter-ahead CI likewise increased from 33.3 percent in the previous survey to 37.4 percent. Businesses were counting on favorable weather conditions and typically strong summer revenues to support near-term growth. They had also expected government spending to pick up as investor confidence recovers.

BES results gathered before Mideast crisis escalation

These, the BSP said, were the BES results gathered before the escalation of the Middle East conflict at the start of March.

“The February 2026 BES was conducted before the onset of the recent Middle East conflict. The sustained recovery in business confidence and stable inflation expectations will therefore depend on how long the conflict lasts and how it affects the domestic economy,” the BSP’s statement read.

Last Thursday, the central bank announced it would keep interest rates steady for now, citing manageable inflationary pressures, weak economic growth lingering from last year’s corruption scandal, and the limited effectiveness of monetary policy in addressing supply-driven pressures stemming from the Middle East conflict.