More Philippine CEOs bullish on business growth – survey

MANILA, Philippines - The top business executives in the counrty are more optimistic about the future of their businesses as opportunities are seen to widen despite threats of increasing tax burden, overregulation, and skills shortage, a joint study by the Management Association of the Philippines (MAP) and Isla Lipana & Co. showed.

In a press briefing yesterday, MAP and Isla Lipana officials unveiled the results of the 2015 Philippine CEO Survey Report which studied factors affecting the business community based on the perspective of the leaders of large corporations and small and medium enterprises.

The report revealed 73 percent of CEOs surveyed are very confident about their business growth in the next 12 months, while 62 percent are very optimistic on growth prospects in the next three years.

The report further showed these CEO’s are slightly more confident in the growth of their business than the revenue growth prospects of the industry where they belong over the near term.

 “This optimism of the CEOs is further evidenced by their ability to see more opportunities to grow. Eighty-five percent of the CEOs we surveyed say there are more opportunities today than three years ago, compared to 56 percent who say there are more threats,” the study showed.

Among the biggest opportunities for growth seen by the country’s business leaders are the untapped local market for banking, demand for basic services such as telecommunications, and the upcoming establishment of an Asean Economic Community.

 “Progress in the Philippine economic landscape is also seen to present growth enablers to businesses. The country’s economy grew remarkably during the past few years. Businesses have learned to identify opportunities by responding to the megatrends in the increasingly global market. And as the country and business players strive to compete and remain relevant, more growth opportunities will emerge,” the report said.

Meanwhile, CEOs have identified increasing tax burden, overregulation, geopolitical uncertainties, and access to affordable capital as their top concerns in terms of economic and regulatory risks.

As far as business-related threats are concerned, availability of key skills, cyber dangers, speed of technological changes, and high power costs were cited as their top worries.

 “The majority of the respondents at 87 percent expressed concern regarding the increasing tax burden. The country has the highest corporate tax rate in Asean that is why CEOs are worried about the competitiveness of the Philippine tax structure and increasing taxes. Some CEOs think the tax regime should be revisited to be more business friendly and to encourage more investments,” the study said.

The majority of the CEOs surveyed at 78 percent believe  good governance should be the government’s top priority moving forward.

This is followed by adequate physical infrastructure at 72 percent and internationally competitive and efficient tax system at 52 percent.

Internally, the country’s business leaders see innovation as key to their growth and survival in the coming years.

The report said 84 percent of the CEOs who participated in the study consider innovation critical and important to their organization’s growth.

As such, the study said companies which view innovation critical and important allocate a larger percentage of their revenues for research and development and innovation initiatives.

When asked for the reasons behind innovating, the study revealed about 96  percent of the CEOs say  they innovate to stay on top of competition, remain relevant and grow revenues.

MAP president Francisco del Rosario Jr. said the Philippine CEO Survey Report, the first of a series of annual CEO surveys, is expected to benchmark the changes in how CEOs think, react and innovate.

The study pooled a total of 96 business leaders, 70 percent of whom came from large corporations.