Businesses’ outlook over their revenue growth for the next 12 months slightly improved from a year ago but a great majority expect the economy to recover in two to three years, much longer than what multilateral agencies expect.
Results of the PwC Philippines Midyear Survey of 131 chief executive officers in April to May showed 63 percent are confident over their revenue growth — slightly up from 59 percent in the June 2020 survey.
Alex Cabrera, chairman and senior partner of PwC Philippines, said 70 percent CEOs expect economic recovery will happen in three years yet with present-day concerns fuelling CEOs pessimism: the Delta and other variants of the new coronavirus disease 2019 (COVID-19) and the speed at which vaccination is happening.
With the Philippines far from achieving herd immunity as well as the ongoing restrictions, 58 percent of the CEOs believe that the country’s real GDP growth rate will be below 3 percent in 2021.
On revenue downturn caused by COVID-19, Cabrera said 73 percent of the CEOs expect further losses with 10 percent expecting as much as 30 percent in losses. These respondents are in exports ,the financial services and consumer sector.
The CEOs have been rolling out recovery plans with implementation of sustainable practices as their priority, as indicated by 57 percent of the respondents.
The CEOs are exploring new market channels such as online even as they launch new products particularly digital to meet consumer demand.
However, 31 percent of the respondents are deferring general capital investments.
The survey showed 70 percent of the respondents have no plans of raising finance with more than 50 percent saying their cashrunway up to six months
“They are not raising funds but are putting in equity; they are looking for partners so that is why there is a lot of action in the M&A (mergers and acquisitions) space regardless of industry. While there are some (companies tap) bank financing, equity financing is fund raising of choice. CEOs are trying to spread the risks and do not mind spreading the benefits,” said Cabrera, As businesses continue to pivot as COVID-19 is still very much threat, 76 percent of CEOs expect 50 percent of their workforce would be working from home on a permanent basis.
Effective and equitable vaccination was listed by the CEOs as their top recommendation to the government followed by tax incentives and strong recovery plan for all sectors as well as safe reopening.
By industry, Cabrera said financial, health and pharmaceuticals, and telecommunications expect their growth will be muted while manufacturing including exports, consumer and retai and food and beverage remain strong.
In all these, Cabrera said CEOs think infrastructure remains the missing link.
