CEOs remain optimistic yet conservative about the country’s growth in the coming years, according to a survey.
A survey conducted by Isla Lipana & Co./PwC Philippines (PwC) for the PwC MAP 2020 CEO Survey asked the CEOs in the Philippines about their plans to adjust to the current reality, and recover from the impact of the pandemic.
As the Knowledge Partner of this year’s MAP (Management Association of the Philippines) International CEO Conference, PwC Philippines conducted the 2020 Philippine CEO Survey Report. The survey reflects the conference's theme “A Whole New World: Reigniting the Stalled Global Economy”.
According to the survey, 58 percent of CEOs are confident in their industry’s prospects for revenue growth over the next 12 months. Broken down, only 21 percent are very confident, 37 percent are somewhat confident, 27 percent not very confident, and 14 percent not confident at all.
In terms of their particular organization, only 59 percent are confident about revenue growth over the next 12 months, 17 percent very confident and 42 percent somewhat confident. This is a large drop from the 2017 PWC/MAP survey which showed that 88 percent were confident.
But CEOs believe that businesses will recover in three years with a large majority of 90 percent optimistic. Broken down only 45 percent are confident, 45 percent somewhat confident, and 9 percent not very confident.
For this year, 74 percent of the CEOs believe that the economy will contract in 2020. Broken down, 57 percent said the GDP will contract by 2-4 percent while 17 percent said GDP will contract by 2 percent and 4 percent by 3 to 5 percent.
Majority or 73 percent of the CEOs said the Philippines real GDP growth rate for 2021 will grow by just between 1 to 5 percent.
In terms of recovery period, 43 percent said recovery to take 2 to 3 years, 39 percent said 1 to 2 years, 16 percent said 3 years and only one percent said economy to recover in less than a year.
The survey also showed that 12 percent of CEOs said the COVID-19 has no impact but 36 percent said COVID will impact 10 to 30 percent of organization.
Atty. Alex Cabrera, chairman and senior partner of PWC Philippines, noted that 40 percent of businesses workforce have been affected because of the pandemic.
But Cabrera also noted businesses are not giving up a business model that is giving them efficiencies.
CEOs said that government has bigger role in pump priming the economy to supplement lost income and unemployment.
In terms of priorities, CEO said government should focus on healthcare system infrastructure, agriculture and food security, education, MSMEs, transport, digitalization, manufacturing, tourism, technology startups and banking.
While companies are concerned about profitability, majority are prioritizing the health of workers with over 61 percent they will ensure safety requirements in workplaces to protect workers.
Interestingly, three quarters or 73 percent see their organizations implementing a work from home policy even after COVID-19.
A majority of 87 percent of the CEOs believe their organizational culture empowers employees to work effectively at home if the need arises.
Notably, the work from home arrangement is seen to impact office space leasing as CEO are reducing their office space. The survey said that 40 percent of CEOs see a potential 40 percent reduction in their office space in the next 12 months.
Top five critical leadership skills during a crisis are communication, agility, critical thinking, decisiveness, and innovativeness.
Atty. Francisco “Francis” ED. Lim, MAP President, is optimistic that business leaders will help each other succeed in the changed environment.
“This year, we are holding the MAP International CEO Web Conference with the theme ‘A WHOLE NEW WORLD: Reigniting the Stalled Global Economy’ conscious of the fact that it is indeed a changed world and we are facing big problems that we may not have the answers for. This makes it more critical that we hold discussions to learn from one another and help each other. The MAP CEO Conference and the CEO Survey results will hopefully guide the participants in transforming their businesses as the world order reshapes itself.”
Cabrera also expressed confidence that the Philippines will not only survive the pandemic, but even surpass the pre-COVID growth levels. “2020 is a year that we will never forget. While we are experiencing difficulties, I am sure that we will thrive in the changed environment. We should look at this pandemic as an opportunity for us to create a new world, one that we will be proud to pass on to the next generation and not just restore the one we have before. If we do this, I am confident that we will rise as a stronger nation.”
“I am grateful to the 161 CEOs who have shared their insights with us,” said Cabrera. “We are facing one of the most difficult times in our lives, and it is important for us to share our ideas and plans to help and learn from each other to survive this crisis.”
The survey, conducted from mid-July to mid-August, had 161 respondents. Survey composition includes 50 percent large companies, 34 percent medium, 10 percent small and 6 percent micro. These companies are engaged in professions and business services, financial services, technology, manufacturing, transport and logistics.