Consumer confidence declined substantially in the second quarter of 2026, as more households anticipated higher food and fuel prices due to the Middle East conflict, a Bangko Sentral ng Pilipinas survey said Friday.

Consumers likewise expected higher unemployment and a weaker Philippine peso.

The confidence index (CI) declined across all reference periods based on the latest quarterly Consumer Expectations Survey (CES) of the BSP.

Aside from concerns over higher fuel and food prices, governance-related issues also weighed on consumer sentiment.

Consumers also anticipated higher spending on essential goods and services but were less inclined to purchase big ticket items such as motor vehicles and real properties. Households are also less likely to borrow and save, reflecting a more guarded outlook on their finances.

Year-ahead inflation expectations of households slightly exceeded the BSP’s 3-percent target but remained below the 4-percent tolerance ceiling. Respondents expect inflation to accelerate due mainly to higher prices of food and utility.

The BSP continues to closely monitor the impact of the Middle East conflict on domestic prices and the broader economy.

The CES is a key economic surveillance tool of the BSP. Its results are among the forward-looking indicators considered in monetary policy formulation. Bangko Sentral ng Pilipinas