By means of Justine Irish D. Table, Reporter
MAJORITY of CEOs (CEOs) in the Philippines are conFA study shows that despite geopolitical uncertainties, their organizations will see revenue growth over the next twelve months.
The results of the survey conducted by PwC Philippines in collaboration with the Management Association of the Philippines (MAP) show that 85% of 168 CEOs are optimistic that their company will achieve revenue growth in the next twelve months.
The results of the survey, which ran from July 8 to August 9, showed improved optimism compared to the 79% of 157 CEOs who said they were confident about revenue growth last year.
Meanwhile, 86% of CEOs are confident about revenue growth over the next three years, up from 87% in the previous survey.
The survey also found that 86% of CEOs are fraudstersFIdentity on the sector’s prospects for the next twelve months, up from 83% in the previous survey. This is the highest level of optimism since the pandemic.
“What has contributed to the optimism among our CEOs here in the Philippines is mainly the economic growth of our country,” said Karen Patricia A. Rogacion, deals and corporate partner at PwC, during a press conference.Fon Monday.
She noted that the Philippines showed faster economic growth despite geopolitical uncertaintiesFaffected economies in the United States and Europe.
“When the year started, we had a slow start on a global level. We are still feeling the impact of the war between Russia and Ukraine, as well as the impact of the Chinese real estate crisis,” she said.
“Several economies, such as the US and even Europe, expected a recession due to high interest rates and unstable market conditions. However, in the Philippines we showed rapid growth,” she added.
The Philippine economy grew 6% in the United States Ffirst six months of the year, reaching the low level of the government target of 6-7% this year.
In the survey, CEOs said infrastructure development, domestic consumption and foreign direct investment are the key drivers of growth over the next 12 months.
“Given the three key drivers, it is also consistent that CEOs say our government is doing a good job in boosting infrastructure development, forging stronger relationships with other countries and controlling inflation,” Ms. Rogacion said.
However, 62% of CEOs said there are geopolitical uncertainties due to the war between Russia and Ukraine, conFcrimes in the West Philippine Sea, and the upcoming elections in other countries keep them awake at night.
“We have actually been indirectly and directly affected by challenges arising from global supply chain pressures, inflation and other related threats,” she said.
Donald L. Lim, chairman of the MAP CEO Conference Committee, said CEOs fear geopolitical uncertainties as they could suddenly disrupt supply chains and operations.
“I think the geopolitics, whether it’s Ukraine-Russia or even the West Philippine Sea, is a big unknown. We don’t know what will happen. But if that happens, it will have serious consequences for the company,” he added.
However, Roderick M. Danao, chairman and senior partner of PwC, said some companies are already beginning to manage and limit the eFconsequences of geopolitical uncertainties.
“A few local companies have effectively tried to mitigate the impact [through] product diversification, market diversificationFication and diversification of the supply chainFication,” said Mr. Danao.
“All this must of course be supported by long-term risk management plans so that the company can adapt and proactively manage the impact of the geopo crisis.litical conflicts,” he added.
TECHNOLOGICAL INNOVATION
The research shows that 46% of CEOs believe that their company will no longer be viable after ten years if it continues on its current path.
According to PwC, new technologies such as generative artiFicial intelligence (GenAI) will revolutionize business models, reasonFimprove work processes and transform industries.
“I always believe that AI will definitely bring more opportunities than threats,” said Mr. Danao.
In the survey, 40% of CEOs said they have already embraced the technology, while 71% believe GenAI will change the way their companies create, deliver and capture value.
While 78% of leaders believe technology can improve the quality of their company’s products and services, the survey also found that 61% of CEOs say they are not yet widely adopting the technology in their operations.
When asked why adoption is still low, Mr Danao and Mr Lim said AI is still in its infancy in the Philippines.
“Awareness is still very low at the Philippine corporate level. We are all excited about what this AI can bring to our organization. But embedding AI is still a work in progress. There will be a need for investment and upskilling of the workforce,” Mr Danao said.
“We are just at the tip of the iceberg. I think you’ll be lucky if you have true AI adoption by the majority, i.e. more than 50% Ffive years. It will take a long time,” Mr Lim said.
Mary Jade Roxas-Divinagracia, deals and corporate finance managing partner at PwC, said AI adoption will be led by sectors such as healthcare, banking, financial institutions and retail.
“And then you have one of the most important industries in the Philippines, business process outsourcing, and this could be a game changer for them, not only on the risk side but also on the opportunity side,” she added.
However, Mr Lim said full adoption of AI could lead to job losses if the workforce cannot keep up.
“AI will not replace jobs. The people who use AI will replace those who don’t know how to use it. So I think the problem is more in education because the teachers don’t understand this,” he said.
“So we need to ensure that the education system prepares our next three batches of graduates to use and leverage AI. Will there be job losses? I think that will be the case. Because it cannot catch up,” he added.