Most chief executives of Philippine companies have taken drastic measures amid the COVID-19 pandemic, including the cancellation of investment plans, according to a survey jointly organized by the Managers Association of the Philippines and Isla Lipana & Co./PwC Philippines.
The PwC MAP 2020 CEO Survey which covered the months of July and August asked 161 chief executives about plans to adjust to the reality and recover from the impact of the pandemic.
It said 51 percent of the CEOs either deferred or canceled planned general capital investments following the effects of the pandemic, while 24 percent either deferred or canceled planned acquisitions.
MAP president Francis Lim said the strategy was to maintain liquidity or to preserve cash flow, as CEOs were making changes in their products and services to rebuild revenue streams.
The survey said 80 percent of the CEOs implemented cost containment to reduce the impact of the health crisis to operations and 57 percent shifted to sustainable practices.
About 22 percent of the CEOs also tapped loans to restart businesses, while 19 percent welcomed new equity partners and 7 percent exited overseas market to save on costs.
It said despite the downturn, most CEOs or 83 percent of them were optimistic of an economic recovery within the next three years.
Chief executives were also more positive about economic growth in 2021. The survey said that while many did not believe the economy would be back to health soon, 84 percent of the respondents said the economy would grow in 2021.
The CEOs remain optimistic although conservative about the gross domestic product growth in the coming years. About 73 percent of respondents expect the economy to expand 1 percent to 5 percent in 2021 from a lower baseline in 2020.
The expected key drivers to growth include infrastructure development, which got 56 percent vote from the CEOs, followed by government spending with 63 percent which is at par with domestic consumption; BPO services with 39 percent; and manufacturing services with 27 percent.
The chief executives agreed the government should focus on improving the health system, infrastructure and agriculture and food security.
They said the government should prioritize and provide more budgets to health care infrastructure and agriculture and food security.
Results showed that despite the general optimism on the economy, 78 percent of the respondents were expecting losses of up to 50 percent of the 2020 revenues as a result of the pandemic.
Several industries were more negatively impacted than the others. In particular, automotive manufacturing, hospitality and leisure were the least confident sectors.
Media and entertainment, primarily online advertising and BPO and professional and business services were the most optimistic.
About 59 percent of the CEOs expressed confidence in their own organizations’ short-term goals, compared to 87 percent back in 2017.
PwC Philippines chairman and senior partner Alexander Cabrera said he remained confident that the Philippines would not only survive the pandemic, but even surpass the pre-COVID growth levels.
“The year 2020 is a year that we will never forget. While we are experiencing difficulties, I am sure that we will thrive in the changed environment. We should look at this pandemic as an opportunity for us to create a new world, one that we will be proud to pass on to the next generation and not just restore the one we have before. If we do this, I am confident that we will rise as a stronger nation,” Cabrera said.
As the Knowledge Partner of this year’s MAP International CEO Conference, PwC Philippines conducted the 2020 Philippine CEO Survey Report. The survey reflects the conference’s theme “A Whole New World: Reigniting the Stalled Global Economy.”