Philippine businesses turned less optimistic about the economy in the third quarter of 2025, weighed down by seasonal factors and global uncertainties, according to the Bangko Sentral ng Pilipinas (BSP).

Results of the latest Business Expectations Survey (BES) showed that the overall business confidence index (CI) dropped to 23.2 percent in Q3 2025 from 28.8 percent in the previous quarter.

The BSP said the decline was due mainly to weaker demand during the so-called “ghost month,” the onset of the rainy and typhoon season, and lingering global headwinds, including higher US tariffs, geopolitical tensions and weaker foreign demand.

A positive CI indicates that more respondents are optimistic than pessimistic about business conditions.

Stronger optimism for Q4

Despite the softer sentiment in Q3, firms expressed stronger optimism for the coming quarter, with confidence rebounding to 49.5 percent in Q4 2025.

However, the outlook for the next 12 months moderated slightly to 48.1 percent, though it remained firmly in positive territory.

Businesses also expect inflation over the next year to stay within the national government’s target range, suggesting that price expectations remain anchored.

According to the BSP, such inflation conditions are favorable for investments and job creation.

The BES is one of the central bank’s key surveillance tools and serves as a vital input in the formulation of monetary policy.