More business leaders believe the Philippine economy still needs more than two years to recover from the impact of Covid-19, a new survey of PwC Philippines and Management Association of the Philippines (MAP) CEOs (CEOs) has revealed.
The Philippine PwC MAP 2022 CEO Survey that follows the conference’s theme “Victories for Change: Prospering in a World of In-Betweens” polled 119 CEOs, most of whom are MAP members. Respondents answered the survey online, with responses spread across a range of industries.
Of the total survey respondents of chief executives, 52 percent believe it will take more than two years for the Philippine economy to recover from the ill effects of the pandemic, which contradicts the government, particularly the National Economic and Development Authority (NEDA), forecasts an economic recovery.
The NEDA said earlier that the Philippine economy is expected to return to its pre-pandemic growth trajectory by this year as the country continues to build on progress in recovering from Covid-19 from the first half of the Marcos administration.
Despite global and local challenges, 87 percent of CEOs are confident their company will see revenue growth in the next 12 months and 89 percent in the next three years, according to the PwC CEO’s MAP 2022 survey, noting that Possible sources of optimism include economic growth of more than 7 percent in the first two quarters of 2022.
“While the global economy has been disrupted by the impact of the Russian-Ukrainian war on commodity prices and supply chain conditions, the Philippines has not been severely affected. Although the war has led to higher fuel and wheat costs, the impact on the Philippines has not been as severe as the Asian financial crisis in 1997 Because of the country’s geographical distance from the war-torn countries as well as limited trade activities with both Russia and Ukraine,” the report stated.
The chief executives said that infrastructure development, domestic consumption and government spending will be the main growth drivers for the Philippine economy in the next 12 months.
“As a major source of employment, having contributed more than six million jobs before the pandemic, infrastructure will remain among the new administration’s top priorities,” the survey said, noting the government’s direction to maintain spending on infrastructure development at 5 percent. to 6 percent of the country’s gross domestic product.
To recover from the pandemic, the chief executives also stressed that the government must prioritize agriculture, education and health care in the next two years.
“While self-sufficiency has been the government’s long-term goal, challenges such as poor infrastructure, backyard farming, and a lack of innovation, as well as ineffective implementation of the land reform program, have prevented the country from fully producing its agricultural needs,” the report said.
Meanwhile, CEOs have identified the United States and China as the two most important countries for their companies’ growth. The two countries are also the Philippines’ largest trading partners in 2021, exporting $11.8 billion and $11.6 billion worth of products to the United States and China respectively.
They also believe that Japan, which was not part of the biggest market last year, has emerged as the third most important country this year, as the Asian neighbor has been providing jobs to Filipinos through more than 900 Japanese companies in the Philippines.
Moving forward, CEOs have identified accountability and transparency, fighting corruption, and attracting more foreign investment as the top three areas the Marcos administration must prioritize. They said prudence and appropriate government spending must be ensured as the debt owed to the government was 12.89 trillion pesos in July 2022.
“The CEO survey results tell us the journey we should take, as well as a mirror showing where we are.
The leaders’ collective insights give everyone a level of confidence about how they plan their trip, where they are falling behind, as well as what can set them apart,” said Alex Cabrera, President Emeritus of PwC Philippines and Leader of Environmental, Social and Corporate Governance.
“I also hope that the government will take into account these sentiments because the private sector is simply an invaluable and indispensable partner for achieving success in nation building and global competitiveness,” he added.
For his part, MAP President Rogelio Singson noted that the survey sparks dialogues and ideas among CEOs. “This eighth part of the annual PwC MAP Philippines CEO survey series was conceived to measure 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 that brings together business leaders from various fields to exchange ideas and experiences, and imbue them with knowledge and passion to remain competitive in a highly globalized environment.”