Security trails governance, infra on CEOs’ priority list

Peace and order ranked only third among reform areas which the country’s top business executives want the Duterte administration to prioritize, with good governance and adequate physical infrastructure leading the list, a joint study by the Management Association of the Philippines (MAP) and Isla Lipana & Co./ PwC Philippines showed.

Results of the PwC and MAP 2017 CEO Survey Report showed that the country’s CEOs and business leaders remain bullish on the growth of the economy as well as of their companies’ revenue amid concern over threats of terrorism, increasing tax burden, inadequate basic infrastructure, geopolitical uncertainty and overregulation.

In the report, 68 percent of the business executives polled believe gross domestic product will grow between six to seven percent this year, with some four percent expecting it to be even higher.

“Such optimism is anchored on the belief the Philippines will still have one of the fastest-growing economies because of the improved business environment, demographics, and continued collaboration between the government and private sector,” the report said.

A majority of the CEOs likewise expressed strong confidence in achieving revenue growth over the next 12 months, with 54 percent saying they are very confident and 34 percent “somewhat confident.”

In order to continuously ride the growth momentum, however, CEOs indicated priority reform areas they wish the government to undertake.

Topping their list is good governance, followed by adequate physical infrastructure and peace and order. Competitive tax system came at fourth and adequate digital infrastructure fifth.

As far as economic, policy, social and environmental threats to their companies’ growth are concerned, terrorism was cited by 89 percent

of the respondents, while increasing tax burden and inadequate basic infrastructure were named by 83 percent and 82 percent of those polled, respectively.

“Overall, the majority of CEOs remain highly optimistic about their companies’ growth prospects and opportunities albeit mindful of increasing threats. They also have high expectations that the government will fulfill its role in executing the country’s comprehensive development program,” the report said.

Asked to identify the initiatives and changes they will implement to respond to the changes in the macroeconomic and business environment, 75 percent of the CEOs said they would enter into a strategic alliance or partnership in the next 12 months, while 73 percent said they would implement a cost-reduction initiative.

Meanwhile, 45 percent of the business executives said their companies plan to compete or expand to other countries over the next three years.

Top destinations include Vietnam at 20 percent, Indonesia at 19 percent and Malaysia at 16 percent.

“CEOs would like to prioritize these countries mainly because of the bright economic outlook. Vietnam’s economy, for instance, is expected to benefit from the strong investments in the manufacturing sector, openness to trade, political stability, growing tourism sector and ongoing reforms,” the report said.

The PwC-MAP 2017 CEO Survey Report polled 120 CEOS, 82 percent of whom are from privately-owned firms while the remaining 18 percent are from publicly-listed companies.