Top executives in the Philippines are confident of higher revenue growth in the next 12 months up to the next three years, but a large number of these CEOs also said that corruption is the number one factor that could delay Philippine economic recovery, according to a survey.
The PwC Philippines, as Knowledge Partner for the Management Association of the Philippines’ (MAP) International CEO Conference, conducted the PwC MAP 2022 Philippine CEO survey during the mid-July August with the theme “The Wins of Change: Thriving in a World of In-Betweens”.
Since the Philippine National Elections in May 2022 introduced changes in leadership, the CEOs identified that the new administration should prioritize accountability and transparency, fight against corruption, and attracting more foreign investments.
Notably, business leaders also identified corruption (67 percent), lower domestic (38 percent), political uncertainty (30 percent), uncontrolled inflation (29 percent), and rising oil prices (28 percent) as the areas that could delay the country’s economic recovery.
PwC Philippines Chairman Emeritus and ESG Leader Alex Cabrera explained that CEOs placed strong emphasis on corruption as it relates to social impact and governance. He further noted that “people are more aware now ... just reading from the news. Even during the height of the pandemic there was a lot of corruption incidents from the agencies that were supposed to take care of our people.”
He further cited that the sad state of corruption in the country has been reflected in the country’s Doing Business surveys where the Philippines has yet to “break this barrier of corruption in different agencies.”
Cabrera also added that governance is a major pillar of companies’ adoption of ESG (environmental, social, and corporate governance) initiatives. “That means that you need to do everything aboveboard,” said Cabrera.
Meantime, business executives said that growth drivers of the Philippine economy in the next 12 months are infrastructure development (62 percent), domestic consumption (59 percent), and government spending (46 percent).
Majority (75 percent) of businessmen also consider the US as most important to their overall growth followed by China (65 percent), and Japan (53 percent).
Full recovery from the impact of the pandemic is still has a long way to go with 35 percent of CEOs said that 35 percent still have not recovered from the pandemic. Only 38 percent expect significantly higher revenues this year than pre-pandemic, 21 percent said they expect to go back to pre-pandemic sales level, and 15 percent still significantly lower than the pre-pandemic.
With that the CEOs urged the government to prioritize agriculture and food security, education, and healthcare system.
Post pandemic, the survey showed that 64 percent of businesses have adopted technology and digital upskilling goals, 58 percent introduced new talent retention, 49 percent said they improved their customer experience and 46 percent have increased investments in innovation.
The CEOs also said that threat of new COVID-19 variants and potential lockdowns topped the factors that could delay company’s growth and recovery, followed by talent constraints, and ability to keep up the changing innovations.
In terms of sustainability practices, the survey further revealed that majority of firms have yet to consider these issues. The survey showed that 47 percent have not factored in climate change and environmental damage in their strategic risk management and only 43 percent have explicitly factored in sustainability practices.
Similarly, only 25 percent of CEOs have made carbon-neutral or net-zero commitment, as against 75 percent that have not.
”The CEO survey results tell us the journey that we should take, as well as a mirror on where we are. The collective insights of leaders give everyone a level of confidence on how to plan their journey, where they are lagging, as well as what could set them apart. I also hope the government will take heed of these sentiments as the private sector is simply an invaluable and indispensable partner to achieving success in nation building and global competitiveness,” said Cabrera.
MAP President Rogelio “Babes” L. Singson pointed out that the survey sparks dialogues and ideas among CEOs. “This eighth of a series of annual PwC MAP Philippine CEO Surveys are envisioned to benchmark the changes in how CEOs think, react and innovate. It has become a regular part of the MAP International CEO Conference, which continues to serve as a premier venue for bringing together business leaders from various fields to share insights and experiences, and imbue them with the know-how and passion to remain competitive in a highly globalized environment.”
PwC Philippines Chairman and Senior Partner Roderick Danao cited the 119 CEOs in the country who lent their time and thoughts to our survey.
Danao cited the CEOs for remaining optimistic while keeping their eyes peeled for unexpected disruptions and opportunities.