Philippine business sentiment turned pessimistic in July amid renewed concerns over tensions in the Middle East, higher oil prices, and persistent inflationary pressures.

Results of the latest Business Expectations Survey (BES+) show that the overall confidence index (CI) turned negative in July from neutral in June.

But, firms remained optimistic about business prospects for the next 12 months, albeit less so than in the previous survey. Firms expect economic activity to moderate and inflation to remain above the Bangko Sentral ng Pilipinas (BSP)’s 4-percent tolerance ceiling.

Over the next 12 months, fewer firms indicated plans to hire additional workers amid expectations of softer growth and elevated inflation.

Nevertheless, firms in the industry sector still reported plans to expand operations next year.

The BSP continues to monitor the economic implications of developments in the Middle East, particularly their impact on business and consumer sentiment, as well as household and corporate spending and investment decisions. Business and consumer sentiment are among the data points that the BSP considers in setting monetary policy. ​Bangko Sentral ng Pilipinas