CEOs optimistic about PH economy
Most Philippine CEOs remain optimistic about the country’s economic growth, which is expected to outpace the Southeast Asian average this year despite a slower-than-expected first half.
A poll conducted by the Management Association of the Philippines (MAP) and PricewaterhouseCoopers (PwC) found 79 percent of “business leaders are positive that the Philippine economic growth will exceed the average ASEAN economic growth for 2018.”
MAP and PwC officials did not detail the chief executives’ outlooks, only noting that based on International Monetary Fund forecasts, the Philippines is expected to post 6.7 percent growth this year compared to 5.2 percent for the Association of Southeast Asian Nations.
Domestic consumption, infrastructure, outsourcing and services were tagged as the likely drivers, followed by remittances, investments, and global and social trends.
The survey, which was conducted from July to August and involved 122 respondents, also asked about preparations being done to address the impact of business disruptions.
PwC Philippines Managing Partner Mary Jade Roxas said 89 percent of the respondents were confident about revenue prospects for the next 12 months due to the higher disposable incomes from a government tax reform program and higher state spending.
The result, however, is lower compared to the 92 percent recorded a year earlier.
Alexander Cabrera, PwC Philippines chairman, said the lower confidence could be attributed to “uncertainties” brought about by new tax reform proposals — the Duterte government wants to trim tax incentives granted to investors — and some “political uncertainties.”
“They expressed concern and some of their investments are being halted because of the uncertainties … These businesses, they want predictability,” he said.
Cabrera said that CEOs from the outsourcing industry were the most pessimistic.
Still, 76 percent were looking at organic growth to drive results for the year, with 59 percent eyeing new strategic alliances and partnerships. Another 45 percent are implementing cost reductions and a fifth were outsourcing some requirements.
Asked about expansion plans, survey respondents said they were looking at Singapore, Indonesia, and Vietnam. Startup CEOs were particularly more upbeat than those from traditional businesses.
Almost all, or 94 percent, said that their industries had been changed by disruptive innovations in the past ten years, particularly from shifting regulations (80 percent), new kinds of competition (77 percent) and changes in consumer behavior (72 percent).
“Our CEOs understand that they need to move faster to ensure that they’re not left behind,” Cabrera said.
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