Business confidence plunges to 3-year low in Q3

MANILA, Philippines (Xinhua) - The business confidence in the economy declined to a three-year low in the third quarter amid higher cost of raw materials and port congestion, the country's central bank said today.

The latest Business Expectations Survey showed that overall confidence index (CI) eased to 34.4 percent, below the 50.7 percent recorded in the second quarter. The third quarter CI was the lowest recorded since the third quarter of 2011 when the index hit 34.1.

The central bank attributed the less bullish outlook to the seasonal lack of demand due to the rainy season, the rise in commodity prices and increase in overhead costs.

Businessmen also blamed the truck ban and port congestion in the Philippine capital and the ongoing controversy surrounding the use of government funds.

Local construction firms were also less optimistic due to the projected slowdown in construction activities during the period due to the rainy season. The wholesale and retail sector, meanwhile, blamed the seasonal slack in demand for its less sanguine outlook.

The sentiment of Philippine businesses in the third quarter mirrored the less bullish outlook in the United Kingdom, Canada, Germany, New Zealand, Singapore, India, and China's Hong Kong.

The Philippine central bank said businessmen were more optimistic in the fourth quarter with an expected increase in consumer spending during the holiday season.

The quarterly survey involved 1,527 firms and was conducted from July 1 to Aug. 15.