Com­pa­nies bullish on busi­ness and econ­omy

The Myanmar Times - - Business | International -

TOP BUSI­NESS­MEN re­main con­fi­dent about their com­pa­nies’ prospects in a fast-grow­ing econ­omy, ac­cord­ing to results of a sur­vey con­ducted by Isla Li­pana & Co./PwC Philip­pine in col­lab­o­ra­tion with the Man­age­ment As­so­ci­a­tion of the Philip­pines that were re­leased to jour­nal­ists yes­ter­day.

The “Build­ing part­ner­ships in ASEAN: Reimag­in­ing the pos­si­ble” chief ex­ec­u­tive of­fi­cer (CEO) sur­vey among 114 Philip­pine re­spon­dents showed that about 68% be­lieve gross do­mes­tic prod­uct (GDP) growth will hit the govern­ment’s 6.5-7.5% target this year, com­pared to the 59% in the 2016 sur­vey, while four per­cent ex­pect GDP to ex­ceed that of­fi­cial goal, com­pared to 2016’s 21%. GDP grew by an av­er­age of 6.45% last se­mes­ter, putting the lower end of the full-year target within reach.

About 63% of sur­vey re­spon­dents be­lieve GDP growth will hit the govern­ment’s 7-8% target for 2018, while nine per­cent ex­pect the econ­omy to ex­ceed that range.

The re­spon­dents ex­pect their busi­nesses to thrive in that gen­eral en­vi­ron­ment, with 54% “very con­fi­dent” and 34% “some­what con­fi­dent” of their com­pa­nies’ prospects for rev­enue growth in the next 12 months, and 57% “very con­fi­dent” and 37% “some­what con­fi­dent” of such prospects in the next three years.

Sim­i­larly, 55% of re­spon­dents were “very con­fi­dent” and 37% were “some­what con­fi­dent” of their in­dus­tries’ prospects for rev­enue growth in the next 12 months, while 54% were “very con­fi­dent” and 39% were “some­what con­fi­dent” of such prospects over the next three years.

PwC Philip­pines As­sur­ance part­ner Aldie P. Gar­cia said at a me­dia brief­ing yes­ter­day in Makati City that the study found CEOs “con­fi­dent and am­bi­tious”, as well as “col­lab­o­ra­tive and vi­sion­ary.”

“They are con­fi­dent that they have what it takes to suc­ceed in an in­te­grated ASEAN,” Mr. Gar­cia said, re­fer­ring to the As­so­ci­a­tion of South­east Asian Na­tions’ dec­la­ra­tion at end-De­cem­ber 2015 of an ASEAN Com­mu­nity. “They are col­lab­o­ra­tive in a sense that they are more open to en­ter­ing into strate­gic al­liance and part­ner­ships (within the coun­try and with other ASEAN mem­bers).”

“Glob­ally, the same op­ti­mism was shared by the ma­jor­ity of CEOs, as dis­closed by PwC in its most re­cent sur­vey pub­li­ca­tion, ‘20 Years In­side the Mind of the CEO… What’s Next?” the Philip­pine re­port read, adding that the big­ger “sur­vey cov­ered 1,379 CEOs from 80 coun­tries and 51% ex­pressed an ex­tremely pos­i­tive view on prospects for rev­enue growth over the next three years.”

Asked to cite the top five con­cerns they be­lieve the ad­min­is­tra­tion of Pres­i­dent Ro­drigo R. Duterte “should pri­or­i­tize dur­ing its term”, the re­spon­dents cited, in de­scend­ing or­der: good gov­er­nance, ad­e­quate phys­i­cal in­fra­struc­ture, peace and or­der, an in­ter­na­tion­ally com­pet­i­tive and ef­fi­cient tax sys­tem, and ad­e­quate dig­i­tal in­fra­struc­ture.

Asked on the top five eco­nomic, pol­icy, so­cial and en­vi­ron­men­tal threats, re­spon­dents cited, in de­scend­ing or­der: ter­ror­ism (89%), in­creas­ing tax bur­den (83%), in­ad­e­quate ba­sic in­fra­struc­ture (82%), geopo­lit­i­cal un­cer­tainty (81%) and over-reg­u­la­tion (77%).

Bribery and cor­rup­tion re­mained the top busi­ness threat (79% from 76% in 2016), fol­lowed by readi­ness to re­spond to cri­sis (78%), cy­ber threats (76%), speed of tech­no­log­i­cal changes (75%) and avail­abil­ity of skills (72%).

Asked what busi­ness ini­tia­tives they plan to un­der­take in the next 12 months “to re­spond to the changes in the macroe­co­nomic and busi­ness en­vi­ron­ment”, 75% of Philip­pine re­spon­dents said they will en­ter into a strate­gic al­liance or part­ner­ship (com­pared to 76% in 2016), 73% said they would re­duce costs (flat from 2016), 46% will out­source a busi­ness process or func­tion (53%), 41% will “com­plete a do­mes­tic merger and ac­qui­si­tion” (31%), 31% will “com­plete a cross-bor­der M&A” (17%), 22% will bring back a pre­vi­ously out­sourced process or func­tion (34% in 2016), while 16% said they would sell ma­jor­ity in­ter­est in a busi­ness or exit a sig­nif­i­cant mar­ket (flat from 2016).

More­over, 52% said their firms “are very likely/likely to com­pete in other in­dus­tries” (45% in 2016), cit­ing the con­sumer and re­tail sec­tor; health­care, phar­ma­ceu­ti­cals and life sciences; re­tail and whole­sale dis­tri­bu­tion; tech­nol­ogy; food and bev­er­age; as well as real es­tate and con­struc­tion.

Photo: Busi­ness World On­line

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