Filipino consumers entered 2026 on a more optimistic note, buoyed by expectations of higher household income and more stable employment, according to the latest quarterly survey from the Bangko Sentral ng Pilipinas (BSP).
However, that optimism may prove fragile.
Results of the BSP’s latest Consumer Expectations Survey (CES)1 show that while consumer sentiment improved in the first quarter, households have become less upbeat about the months ahead as concerns over inflation and governance issues weigh on confidence.
The survey showed the current-quarter confidence index (CI) improved significantly, rising from -22.2% in Q4 2025 to -15.8% in Q1 2026, indicating reduced pessimism among Filipino households.
The BSP said the improvement was largely driven by expectations of higher earnings, more stable employment, additional income streams, and more family members entering the workforce.
But the positive momentum appears to be softening.
The quarter-ahead confidence index slipped from 3.6% to 1.8%, while the year-ahead index declined from 11.8% to 9.6%, suggesting that households remain cautious about the broader economic environment.
According to the central bank, concerns over higher inflation and perceptions of graft and corruption affecting the delivery of public services were among the key factors weighing on future sentiment.
Inflation expectations remain contained — for now
IMAGE CREDIT: Freepik
Despite softer expectations for the rest of the year, the BSP said household inflation expectations remain relatively stable.
Survey results showed inflation expectations stayed below the central bank’s 3.0% target for 2026, while remaining within its ±1 percentage point tolerance range.
The BSP noted, however, that the survey was conducted between January 22 and February 5, before the outbreak of the ongoing Middle East conflict — a development that has since raised global oil price concerns and could influence household sentiment in future survey rounds.
The central bank said it is closely monitoring the potential impact of geopolitical tensions on domestic prices and broader economic activity.
“The BSP continues to closely monitor the impact of the Middle East conflict on domestic prices and the broader economy, and stands ready to take appropriate monetary policy action should rising oil prices lead to more persistent inflationary pressures,” the central bank said.
It added that regulatory relief measures have also been issued to allow banks to extend assistance to affected clients if needed.
Consumer sentiment remains a critical policy signal
IMAGE CREDIT: BSP
The CES is one of the BSP’s key economic surveillance tools and serves as an important input in monetary policy formulation.
The latest survey covered 5,440 households nationwide, including 2,475 households in Metro Manila and 2,965 households outside the National Capital Region, with a response rate of 98.5%.
The results suggest that while Filipino households remain resilient, sentiment could become more vulnerable if inflationary pressures intensify in the coming months.
BSP addresses complaint against governor
BSP Governor Eli Remolona Jr.
In a separate statement, the BSP also addressed recent reports regarding the filing of a case against BSP Governor Eli Remolona Jr.
The central bank said the governor has yet to receive a copy of the complaint and will respond through the proper legal forum once formally served.
The BSP emphasized that both the central bank and the Anti-Money Laundering Council (AMLC) continue to carry out their mandates “in accordance with law, guided by independence, professionalism, and due process.”
“As the Philippines’ central bank, we promote and maintain the nation’s monetary and financial stability, and efficient payment and settlement systems,” the statement read.
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1 The Q1 2026 CES was conducted from 22 January to 5 February 2026, before the onset of the Middle East conflict. There were 5,440 households surveyed nationwide, consisting of 2,475 households in the National Capital Region (NCR) and 2,965 households in areas outside NCR. Samples were drawn from the Philippine Statistics Authority’s 2023 Geo-Enabled Master Sample for household-based surveys. The nationwide survey response rate for Q1 2026 was 98.5 percent with a sampling error margin of ±1.3 percent.
