THE Philippine business environment could remain cautious in 2027 as weak consumer spending and limited purchasing power continue to weigh on demand, according to Management Association of the Philippines (MAP) President Donald Patrick Lim.
Lim said businesses are already looking beyond 2026, which he described as largely a ‘closed book,’ but cautioned that companies may remain hesitant to expand next year unless consumer confidence improves and geopolitical risks ease.
‘Hopefully, next year, it’s better. Let’s plan for some growth. Otherwise, it’s hard to plan,’ Lim told reporters on the sidelines of the MAP General Membership Meeting on Thursday in Makati City.
He said businesses have seen only a ‘little blip’ in revenues this year as economic activity remained sluggish, while the weaker peso has not necessarily translated into stronger domestic demand.
Weak consumer sentiment remains one of the constraints, which is reflected in the Bangko Sentral ng Pilipinas’ (BSP) Consumer Expectations Survey. It showed that the overall consumer confidence fell to -42 percent in the second quarter of 2026, the lowest level since Q4 2020.
For businesses, Lim said, the uncertainty extends beyond domestic demand. The Iran-US geopolitical crisis could still affect the 2027 outlook, particularly if it keeps adding pressure to costs and disrupts trade and supply chains.
A weaker peso could provide some relief to overseas Filipino workers through higher peso-denominated remittances, Lim said, but this does not automatically translate into stronger domestic consumption.
Yet, the expected 2028 elections could provide another source of activity, as election-related spending may begin to pick up in 2027. The MAP president, however, said the extent to which this would translate into stronger consumer spending remains uncertain.
A study by the Philippine Institute for Development Studies (PIDS) found that election periods typically generate additional economic activity through government spending, campaign expenditures, temporary jobs and higher consumer activity.
Treading carefully
WITH demand still uncertain, Lim said companies need to be careful about expanding capacity ahead of actual orders.
‘You want to expand. But if you expand, it’s wrong. You have a warehouse, you have a setup, and you don’t have a customer yet,’ he said.
He also warned against using debt-driven consumption as a way to prop up demand, citing the growing use of digital lending and buy-now-pay-later platforms alongside online shopping.
The concern comes as household borrowing continues to rise. Data from the BSP showed credit card receivables reached P1.24 trillion at end-March 2026, up 28.6 percent from P964.2 billion a year earlier.
‘I also don’t want them to be in debt,’ Lim said, although he made a distinction between ordinary spending, such as family meals and experiences, and encouraging consumers to take on excessive debt.
On the policy side, MAP remains supportive of several priority measures under the Legislative-Executive Development Advisory Council (Ledac), despite changes in the government’s current legislative agenda.
Lim cited the Anti-Political Dynasty Bill, the Party-List System Reform Act, the Citizen Access and Disclosure of Expenditures for National Accountability (Cadena) Act, and the Independent People’s Commission Act among the measures backed by the business group.
MAP also continues to identify taxation, support for micro, small and medium enterprises and electricity costs as areas that could affect business conditions and investment decisions.