CEOs (chief executive officers) of companies in the Philippines expect the domestic economy to recover within three years yet, more conservative than the two-year recovery timeframe of multilateral institutions, a recent survey showed.
This was revealed in the 2021 Mid-year CEO Survey conducted by PwC Philippines, the knowledge partner of the Management Association of the Philippines (MAP), to gauge the sentiments of executives and their plans amid the pandemic. The survey was conducted in the second quarter this year with 131 CEO respondents
Based on the survey results, 70 percent of CEO expects the economy to recover within 3 years, more conservative than the 2-year timeframe of the World Bank and the Asian Development Bank.
PWC Chairman Emeritus Atty. Alex Cabrera, who presented the survey results, remarked that he also went with the CEOs estimate. Cabrera said that less optimistic estimate of the CEOs is also compounded by the present day concern on the Delta variant and the speed of vaccination in the country. These factors, he said, make the CEO findings well founded.
But more CEOs are confident of growth in their organizations. As of June this year, 63 percent of those surveyed project revenue growth over the next 12 months. This is an improvement from 59 percent in the previous survey in September last year.
The most bullish industries are food and beverages; healthcare, pharmaceuticals and life sciences; financial services; and transport and logistics.
A large majority of 73 percent of the CEOs still expect revenue losses this year. In 2020, 40 percent of CEOs’ organizations incurred actual losses of more than 20 percent.
In addition, 84 percent of CEOs said that their employees were infected by COVID-19 with financial services, manufacturing, transport and logistics, and real estate and wholesale distribution as top industries with the most infection.
CEOs were also asked what actions they will take in the next 12 months as a result of COVID-19.
Interestingly, 57 percent of CEOs said they are implementing sustainable practices while 52 percent said they are launching new products/services, and 49 percent said they are exploring new market channels.
Notably, 31 percent of CEOs said they are deferring or cancelling planned general capital investments while another 31 percent said they will restructure employee benefits as part of their action plans over the next 12 months.
As part of their recovery efforts, 70 percent of CEOs said they do not have plans for raising capital in the next three six months. Instead, CEOs prefer bank loans, and equity financing.
Cabrera also noted that equity financing is becoming a financing of choice among companies to spread the risk and share the benefits.
But CEOs said that government can help businesses, which are suffering from the impact of COVID-19.
The executives identified the top government actions to include effective and equitable vaccination program (79%), tax incentives (45%), coordinated and strong mitigated and recovery plan for each sector (40%), and reopen the economy (40%).
With the ongoing vaccination efforts, 69 percent of CEOs expect that their workforce will be fully vaccinated this year.
In terms of work from home policy, 76 percent of CEO said that up to 50 percent of their workforce will be working form home on a permanent basis. Fifty-one percent of respondents said up to 25 percent will be working from home, and 25 percent said over 25 percent to 50 percent.
Source: PWC