Philippine business sentiment improved in May as firms turned more optimistic over prospects of stronger consumer spending and higher corporate earnings, according to the Bangko Sentral ng Pilipinas (BSP).
The BSP said companies showed improved confidence for both the three-month and 12-month outlooks, supported by expectations of lower fuel prices and a possible easing of geopolitical tensions in the Middle East.
“This resonates with firms’ favorable economic outlook,” the BSP said, adding that businesses also expect investor confidence to recover over the period.
Firms also indicated plans to hire more workers in the next three to 12 months as they anticipate stronger business activity.
However, the BSP noted that fewer firms in the industry sector expressed plans to expand operations, reflecting lingering uncertainty in the business environment.
Businesses also expect inflation to remain elevated over the next 12 months and stay above the BSP’s two to four percent target range.
The central bank said it will continue to monitor the impact of the Middle East conflict on domestic prices, economic activity, and overall consumer and business expectations.