Business sentiment in the Philippines remained pessimistic in September, based on the results of the latest Business Expectations Survey (BES) of the Bangko Sentral ng Pilipinas (BSP).

Firms attributed this pessimism mainly to elevated fuel and energy costs and rising prices. Other concerns included Middle East tensions, peso depreciation, and weather-related disruptions.

Firms, however, had an optimistic outlook three months and 12 months ahead. Optimism three months from now was driven by the expected higher business activity during the holidays and the rice harvest seasons.

Year-ahead optimism, on the other hand, reflected growth opportunities in selected sectors, particularly healthcare, education, tourism, financial services, real estate development, and trade-related activities.

Meanwhile, respondents expected inflation to remain above 4.0 percent, the upper bound of the BSP’s tolerance range of 1 percentage point above or below the 3.0-percent target.

The employment outlook 12 months ahead remained positive but was less favorable than in the previous survey round. More industry firms planned to expand operations.

Firms also continued to see growth opportunities across selected sectors, supported by lower inflation, streamlined business procedures, a possible resolution of the Middle East conflict, and improved investor confidence.

The BSP continues to monitor developments in the Middle East and their potential effects on business and consumer sentiment, spending, and investment. These indicators are among those considered in the BSP’s monetary policy decisions.