Business and consumer confidence plunged following the escalation of the Middle East crisis, reflecting renewed pessimism amid domestic and global economic uncertainties, the Bangko Sentral ng Pilipinas (BSP) reported.

Based on its latest Business Expectations Survey, the March business confidence index (CI) fell sharply to -24.3 percent — a 32.5-percentage-point drop from 8.2 percent in February — which the central bank attributed to lingering concerns over the Middle East conflict.

More pessimistic than optimistic respondents

A negative CI indicates that more respondents are pessimistic than optimistic. The quarter-ahead CI also declined significantly to -17.3 percent from 37.4 percent in the previous survey.

“Philippine business confidence for March and the next quarter declined on concerns that rising fuel costs due to the Middle East conflict will dampen consumer spending,” the BSP said.

The central bank added that the 12-month economic outlook also weakened, dropping to 11.7 percent from 51.1 percent, due to “uncertainty over heightened geopolitical tensions in the Middle East and persistent inflationary pressures.”

Investor sentiment had already weakened last year as the flood control scandal dragged economic growth below target, with the business CI slipping to just 0.9 percent in January.