Poll: Most firms project recovery within 3 yrs
MOST corporations anticipate their operations to recover within one to three years, as they look to the government to intensify spending on infrastructure in the pandemic aftermath, according to a survey of businesses.
In the PWC MAP 2020 CEO Survey, 90 percent of corporate officials said they expect their firms to experience revenue growth in the next three years. Further, 58 percent are hopeful their industries will recover over the next 12 months, contrary to the 41 percent who are pessimistic about prospects of a rebound.
On the other hand, three in every four CEOS said the country is staring at a negative GDP by the end of the year, with majority forecasting it would be below negative 4 percent.
As for 2021, 64 percent said GDP may be between 1 percent and 4 percent, as they see the economy slowly recovering on hopes a vaccine will be available by next year.
“The CEOS, however, are not as optimistic at the macroeconomic level. The prolonged lockdown and the continuing rise in the number of Covid-19 cases have a massive impact on the economy,” the PWC MAP survey read.
Over the next 12 months, CEOS believe the government should go aggressive with its buildup of infrastructure units. Based on the survey, two-thirds of corporate officials said infrastructure development will be the main growth driver for the economy in the next 12 months, followed by domestic consumption and state spending.
In terms of recovery, 70 percent of CEOS said the government should provide industry-specific measures to boost confidence in both investments and consumption. Likewise, more than half pushed for the creation of new tax incentives and the crafting of a recovery plan for each sector, especially those swept by the pandemic.
“The Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill, which is Package 2 of the government’s comprehensive tax reform program, is also under review by the Senate. Under the CREATE bill, the 30-percent corporate income-tax rate will be reduced to 25 percent, and is expected to help micro,
small and medium enterprises,” the survey read.
“Once approved, the CREATE bill will bring us closer to the corporate tax rates of the other Asean countries, and will render the Philippines to be more competitive as an investment destination,” it added.
On an organizational level, CEOS disclosed most of them are staring at sales losses of about 10 percent to 30 percent this year, while some are anticipating the worst-case scenario of an over 50 percent revenue decline.
Moving forward, 61 percent of them are changing workplace safety measures and protocols, while more than half are using digital strategies and improving remote work conditions to adapt to the new normal.
They likewise acknowledged the emergence of data platform, contactless payment, artificial intelligence, robotics, smart transport systems, among others, as new technologies that they need to invest on to ease the transition to the new normal.
The survey was conducted by business group Management Association of the Philippines and auditor Pricewaterhouse Coopers from July to August of this year. It gathered the responses of 161 CEOS working for mostly large and medium-sized enterprises.