Philippine businesses were less optimistic about the economy in the third quarter of the year. Their dampened confidence was primarily attributed to the slack in demand during the “ghost month” and the onset of the rainy and typhoon season.

Global headwinds, such as higher US tariffs, geopolitical tensions, and weaker foreign demand, also weighed on business confidence.

Results of the latest Business Expectations Survey (BES) of the Bangko Sentral ng Pilipinas (BSP) showed that the overall business confidence index (CI) declined from 28.8 percent in the second quarter of 2025 to 23.2 percent in the third quarter.

A positive CI means more respondents are optimistic than pessimistic.

Looking ahead, business confidence strengthened for the next quarter, with CI at 49.5 percent, while the outlook for the next 12 months softened to 48.1 percent. Despite the lower year-ahead CI, it remained positive, reflecting businesses’ continued optimism about near-term economic prospects.

Firms also expect inflation over the next 12 months to remain within the National Government’s target range, indicating firmly anchored business inflation expectations. Within-target inflation supports investments and job creation.

The BES is a key economic surveillance tool of the BSP, and its results are important inputs to monetary policy formulation. Bangko Sentral ng Pilipinas