MANILA, Philippines (Xinhua) - Business confidence eased in the third quarter on back of global economic uncertainties, and volatile peso movement, the local central bank said today.
The latest Business Expectations Survey (BES) revealed that overall confidence index (CI) eased to 42.8 percent, compared to the all-time high of 54.9 percent recorded in the second quarter.
BES respondents were worried over the impact of the weak peso and the US Federal Reserves' plan to rein in its stimulus program. The monsoon rains that submerged Metro Manila also dampened business confidence.
Despite the lower CI, the central bank maintained that local businesses' outlook on the economy continued to be favorable in the third quarter.
"The lower but positive CI indicates that the number of optimists declined but continued to be greater than the number of pessimists during the quarter," the central bank said.
The central bank said the business outlook for the fourth quarter is more bullish, with the CI rising to a record 60 percent. The onset of the Christmas season is expected to boost sales. BES respondents are also confident that macroeconomic fundamentals remain sound.
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The central bank said low interest rates, manageable inflation, steady growth of remittances from Filipino workers abroad, credit rating upgrades and rising investment inflows boosted business sentiment.
The buoyant sentiment is encouraging more businessmen to expand their operations. The central bank said 32.1 percent of BES respondents have expansion plans. This augurs well for the country 's employment outlook.
The central bank said the employment outlook index for the next quarter jumped to 31.7 percent from 24.1 percent in the second quarter.