MANILA, Sept. 6 (Xinhua) -- The Philippine central bank said on Thursday that business outlook on the Philippine economy turned less optimistic for the third quarter of 2018, with the overall confidence index (CI) declining to 30.1 percent.

The decline was the lowest since the first quarter of 2010, the Bangko Sentral ng Pilipinas (BSP) said in a statement.

Respondents of the survey, which were drawn from the country's top corporations, attributed their weaker sentiment during the third quarter to increasing prices of basic commodities in the global market, augmented by the effects of the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law on prices of domestic goods.

The respondents also cited rising overhead costs and lack of supply of raw materials and seasonal factors such as interruption of business activities and lower crop production during the rainy season, slack in consumer demand as households prioritized enrollment expenses, as well as the suspension of commercial fishing in Davao Gulf from June to August.

The BSP said the wholesale and retail trade sector registered the biggest decline in confidence.

"Trading firms also cited stiffer competition and effects of weather disturbances as reasons for their less favorable outlook," the BSP said.

Likewise, the BSP said the outlook of the services sector turned less upbeat but continued to be favorable for the current quarter.

Moreover, the respondents expressed concern over the weakening peso, and stiffer competition.

The Philippine peso further weakened to 12-year-low on Thursday, hitting 53.56 to the dollar. This exceeded the 53.55 pesos threshold that was in July 2006. But the local currency ended the trading session at 53.55 to the dollar.

For the fourth quarter of 2018, the BSP said business outlook "turned more upbeat as the next quarter CI rose to 42.6 percent from 40.4 percent in the previous quarter's survey results."

"This suggests that growth may be sustained in the last quarter of 2018," the BSP said.

Respondents' more positive outlook for the last quarter of 2018 was due to expectations of an uptick in consumer demand during the holiday and harvest seasons, the continued increase in orders and projects, and the expansion of businesses and new product lines.

The third quarter 2018 Business Expectation Survey (BES) was conducted during the period July 2 to Aug. 29, 2018. There were 1,466 firms surveyed nationwide.