Businesses are confident of revenue growth prospects over the next 12 months despite slower GDP expansion.
Findings of the PwC MAP 2019 CEO (chief executive officer) Survey showed 88 percent of respondents are confident of revenue growth, with 49 percent of CEOs saying the full year 2019 GDP growth rate will just be between 5 and 6 percent and a smaller proportion of 43 percent believing the country will hit the set target growth of 6 to 7 percent.
Growth fell 5.5 percent in the second quarter — the slowest since the 5 percent growth rate in the first quarter of 2015 — due to the delayed passage of the 2019 national budget, negative impact of El Niño on agriculture, and the construction ban during the election period.
Yet at this level, the Philippines remains ahead of its neighbors such as Malaysia, Thailand, Korea, Taiwan and Singapore.
The survey said CEOs believe infrastructure, domestic consumption, and business process outsourcing and services will drive the country’s growth.
In spite of the ongoing trade war between the United States and China, most of the CEOs surveyed have identified these countries as the most important ones for their growth in the next 12 months.
Such findings, however, are different from the results of our 2017 and 2018 surveys, where CEOs surveyed identified Singapore, Indonesia, and Vietnam as the most relevant countries.
The Philippines’ improving relations with China have a positive impact on the CEOs’ responses.
The stronger ties between the two countries, driven by both countries’ leaders, are helping facilitate economic deals and business collaborations.
Geopolitical uncertainty tops the list of CEOs’ concerns because of the regular news about trade conflicts and shifting alliances.
The government’s push for reforms and new policies, however, may be worrying the CEOs because 82 percent identify over- regulation as one of the top threats to their business.
In past surveys, CEOs were mostly concerned with issues related to policies and terrorism.
This year, CEOs are acknowledging that climate change and environmental damage are serious problems that the country needs to face.
But CEOs, while willing to embrace sustainability in their operations have cited high transition costs, inadequate technology, and economic viability as the main factors that are preventing them from fully adopting such practices.
The survey showed 8 in 10 CEOs expect to change their production/service model in the next three to five years to promote more sustainable practices but only three in 10 have formal plans to fully transition their business to having a circular economy model.
Eighty- three (83 percent) percent of the CEOs say they are doing sustainable practices in their businesses, and most identified efficient use of energy and recycling materials as part of their practices.
But only 44 percent are measuring and reporting the financial impact of their sustainable practices.
Cost reductions or savings remain the traditional way of measuring the impact, as confirmed by 48 percent of the CEOs.
The survey was conducted by PwC for the 17th MAP (Management Association of the Philippines) International CEO Conference that will be held on September 10.