Manila: Business confidence returned to neutral territory in June as firms expected lower oil prices, reduced energy costs, and increased consumer spending from the opening of classes to support economic activity, the Bangko Sentral ng Pilipinas (BSP) said Friday. In its latest Business Expectations Survey, the BSP reported that the confidence index (CI) improved to neutral after earlier weakness, reflecting a more balanced outlook among businesses.

According to Philippines News Agency, firms cited lower fuel and energy costs and higher consumer spending during the school opening as key factors expected to boost business activity. Businesses also remained optimistic about the next 12 months, with the CI at 42.4 percent, on expectations of improving economic conditions. The central bank said the positive outlook persisted despite concerns that inflation could exceed its 4 percent ceiling in 2027.

Many industrial firms plan to expand operations, while businesses across all sectors expect to increase hiring over the next 12 months, indicating continued confidence in economic growth. The BSP, however, said it continues to monitor developments in the Middle East and their potential impact on business and consumer confidence, household spending, and corporate investment.