A vast majority of CEOs of major companies in the Philippines are overwhelmingly optimistic – for their company, their business and the country.
This is despite wars on four fronts – Ukraine, Gaza (Hamas), Lebanon and Sudan, and geopolitical tensions in the South China Sea (West Philippine Sea) and in the Taiwan Strait. Instead of abating, the Ukraine, Gaza and Sudan wars seem poised to escalate.
Any of these conflicts has the potential to erupt into a global war, or even a nuclear war. Expectedly, geopolitical uncertainty is what keeps our CEOs awake at night.
On July 8-Aug. 9, 2024, PwC Isla Lipana and Co. polled 168 CEOs, members of the Management Association of the Philippines, which has 1,200 CEOs as members.
“The CEOs remain upbeat about the global economy despite external pressures; 52 percent believe that global economic growth will improve in the next 12 months. They are also optimistic about their industry’s future; 86 percent expressed confidence in their business prospects and their ability to achieve revenue growth over the next three years,” reports PwC.
Despite ongoing global tensions, 52 percent of CEOs are optimistic about economic improvement. The US has avoided a recession, and labor markets have seen slight improvements in major economies. However, limited global growth is expected, remaining at 3.2 percent in 2024 and 2025, due to high borrowing costs, the lingering impacts of COVID-19 and ongoing conflicts.
When 2024 started, the global economy was still facing the continuing impact of the Russia-Ukraine conflict on supply chains and China’s real estate crisis. Major economies, including the United States, faced recession due to rising interest rates and volatile market conditions.
Moreover, 2024 marks a year of significant political transitions, with leadership changes anticipated in key nations such as the United States, United Kingdom and Indonesia.
Given that policy changes are also influenced by the political environment, uncertainties and fears of further geopolitical tension are still felt across the globe.
The survey touched on a recent MAP conference theme, “Business in Five Movements: Wisdom, Passion and Inspiration Across Five Generations.”
“Businesses today have to deal with five generations: Baby Boomers, Gen X, Millennials, Gen Z and Gen Alpha,” says MAP president Rene Almendras. “Each generation behaves differently and has unique characteristics as consumers, producers, business leaders and citizens. Organizations need to change because market preferences are shifting. The challenge is to ensure that whatever product or service you offer penetrates each generation.”
On having a multigenerational workforce, over 75 percent of respondents identified differences in management and leadership styles as their biggest challenge. Other issues include differences in communication styles and work-life balance expectations.
On succession planning in the next three to five years, 45 percent of companies intend to make changes in their senior leadership.
Only a quarter (25 percent) have established succession plans for all senior executives. Over 60 percent are confident that they have the right measures in place to ensure operational sustainability and continuity in times of leadership changes.
Three-fourths of the respondents agreed that GenAI can improve their products or services and make their processes more efficient. But GenAI adoption remains low, with only 39 percent having implemented it in their organizations.
Incorporating technology into operations is a priority for organizations. In the next 12 months, majority of CEOs plan to make investments in upskilling their workforce in priority areas, automating processes and systems and deploying advanced technologies like AI and cloud to better equip their companies for the evolving business environment.
Infrastructure will drive the domestic economy, with government spending P93 trillion, one reason why CEOs see improvement in global growth.
The CEOs also identified foreign direct investments as a major driver of the Philippine economy. Through the investment schemes under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law and the government’s trade visits, the country was able to secure investment pledges of over P1 trillion.
Consistent with last year’s survey, the CEOs identified the United States, Japan and China as the countries that are most important for their company’s growth. In 2023 alone, the Philippines exported goods worth a total of $32.9 billion to these three countries.
Foreign investments, trade, tourism and foreign relations are seen critical to both the government and the private sector. Aside from the billions of dollars needed to rebuild the war-torn countries, economies across the globe have been directly and indirectly affected through fluctuating energy prices, supply chain issues and inflation.
The world frets on the Nov. 5 US presidential elections. A Trump victory could be bad for US democracy and for Asia, except China and North Korea.
Seen as unhinged, Donald Trump might impose tariffs on European and Chinese products; cut support to Ukraine and withdraw from several foreign institutions.
Effective central bank policies and international cooperation will be crucial in managing inflation and mitigating further risks posed by geopolitical challenges.
MAP sees major conglomerates such as Ayala Corporation, Alliance Global Group and Aboitiz Equity Ventures starting to elevate the roles of the next generation of family business leaders within their organizations.
In our survey, 40 percent of the CEOs are from family businesses, with the majority currently being led by the first and second generations.
The next few years are critical for most family businesses. Succession takes place in a world challenged by health care crises, rapid technological changes, climate change and geopolitical issues.
They say the first generation creates wealth, the second generation preserves it and the third generation squanders it.
A positive COVID-19 pandemic outcome: business leaders became smarter, wiser and more humble.
Business leaders learned to make quick decisions without sacrificing their long-term goals, manage their assets efficiently, adapt to technology and maximize and invest in human capital.
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