MANILA, Philippines -- Business sentiment in the country has improved further to register a fresh two-year high, something monetary officials credited to optimism brought about by the entry of the new administration and favorable macroeconomic fundamentals.

Confidence index for businesses hit +45 percent for the third quarter of 2010, according to results of the latest quarterly Business Expectation Survey, which was conducted between July 1 and Aug. 10 by the Bangko Sentral ng Pilipinas.

The latest index is up from +43.9 percent for the second quarter of this year, and a sharp rise from only +18.4 percent for the third quarter a year ago.

The optimism is seen across all business sectors covered by the survey, including industry, construction, wholesale and retail trade, and services.

The index is a measure of the level of confidence of businesses in terms of their ability to generate profits and their sentiment on the economy in general. The index is computed as the difference between the percentage of respondents that said they were optimistic and the percentage of those who said they were pessimistic.

"Respondents are confident that their own business operations would improve. Their optimism stemmed from the broadly steady volume of total orders and business activity across all sectors in the current quarter," according to the BES.

Rosabel Guerrero, director of the Department of Economic Statistics at BSP, said in a press briefing on Thursday that the rise of the business confidence index was due partly to the smooth transition of power from the Arroyo to the Aquino administration.

Businesses were a bit wary in the weeks toward the May elections, but officials said uncertainty in the country's economic and political environments dissipated with the relatively peaceful elections.

The perceived credibility of the new administration to implement needed reforms, both in the economic and political fronts, also helped boost business confidence, officials said.

Moreover, results of the survey showed that businesses cited favorable macroeconomic fundamentals, such as sustained rise in remittances, for their positive sentiment.

Remittances from overseas Filipino workers fuel consumption of at least 10 percent of Filipino households. The rise in remittances, therefore, is seen by businesses to spur demand for their goods and services.

Deputy Governor Diwa Guinigundo said in the same press briefing that the optimism of businesses in the country has been complemented by the willingness of the banking sector to support investment initiatives of enterprises.

Guinigundo cited an earlier survey by the BSP showing that banks in the country have a growing appetite for lending. He said the country has been enjoying an environment where credit has been easily accessible for investors, especially the large ones.

The latest BES had 1,632 firms that served as respondents. They were selected from the list of Securities and Exchange Commission of the Top 7,000 corporations in the country.