2016 elections not a ‘major’ concern among PH CEOs

MANILA, Philippines – The upcoming 2016 national elections is not a major cause of concern among Filipino chief executive officers (CEOs), according to the PricewaterhouseCoopers (PwC) Asia-Pacific Economic Cooperation (APEC) 2015 CEO Survey released on Monday, November 16. 

While the survey showed how confidence among CEOs in the Asia-Pacific is at its lowest in 3 years, it also highlighted how Filipino CEOs and business leaders in particular are more optimistic about the growth prospects in the year ahead.

PwC chairman and senior partner Alexander Cabrera said most CEOs in the country have the elections in their mind but they’re also seeing how the country’s economy is showing gains. Regardless who wins the next presidential race, he said the investor confidence in the country will remain.

“What’s more important to them is how the happenings in different economies would affect their businesses. What’s more important to them is the country’s relation with other APEC member economies,” Cabrera told journalists on the sidelines of the presser.

Singapore, Canada, and Australia saw leadership changes in the last two months. Five other economies – the Philippines, Singapore, Thailand (tentative), US, Chinese Taipei, and Peru – will hold elections next year. 

“Given the economic and business uncertainties, any potential for new directions on regional economic ties from any of these events will draw attention,” the survey noted.

Vice President Jejomar Binay, Senators Grace Poe and Miriam Defensor-Santiago, and administration bet Manuel Roxas III are the frontrunners in the upcoming elections. Cabrera is confident that the candidates have sound platforms to further the country’s economic growth.

Cabrera said what is important is the next president will make sure that transparency and ease of doing business will be upheld. “What’s important is to increase, improve the people’s trust to the government and how businesses can participate more in growing the economy,” he said.

“Regardless who wins the elections, the growth is already there. My personal opinion is that, we hope we elect the right candidate,” he added.

The survey results are released ahead of the APEC Economic Leaders’ Meeting on November 18 to 19. About 800 CEOs and industry leaders from 52 nations were interviewed for the survey.

Growth prospects are bright

The PwC 2015 APEC CEO Survey showed that 51% of CEOs in the Philippines are also “very confident’ in their growth prospects for the 12-month period. It is almost double the the 28% level of confidence among CEOs in the Asia-Pacific region.

In 3 to 5 years, 45% of CEOs in the country are “very confident” about the  Philippines’ growth prospects. It is also higher than the 38% confidence level of APEC CEOs.

The Philippine CEOs are confident that investments will increase by 68% in the next 12 months. They also share the 34% level of confidence of APEC CEOS in general that the demand for Information Technology like computer systems (design and integration) in the next 3 to 5 years will rise “to a great extent.”

A considerable percentage of the CEOs (29%), albeit not a majority, said demand for risk reduction among CEOs in the country will rise “to a great extent.” It is higher by 5% compared to its APEC counterparts.

Meanwhile, 41% of CEOs in the country said they will be adversely affected “to a great extent” if major disruption of Internet or a cyber attack on critical infrastructure happens. The level of concern among APEC CEOS is lower by 10%.

Still, Cabrera said the Filipino CEOs are betting that regional growth will be there largely due to regional trade agreements and broadband connectivity. “If regional broadband connectivity is improved, that will be our great equalizer,” he added. (READ: New Internet speed minimum throwback to ’90s?)

Natural disasters disrupting a major Asia-Pacific trading or manufacturing hub will also adversely impact them if such happens in the next 12 months, according to 35% of the country’s CEOs. It is higher than the 7% level of concern that APEC CEOs expressed.

“Regardless how much investment you make (in disaster-proofing), no one can really be prepared for a big disaster. That’s why businesses and corporations discuss more about how to make their [operations] risk-sensitive? How should we make our business infrastructure disaster-resilient? How we can help each other to recover swiftly from such disaster?” Cabrera shared.

Services, skilled people, manufacturing

There is low confidence among Filipino CEOs that the country will reduce barriers to imports, exports, movement of skilled people across APEC economies, however.

Only 16% of Philippine CEOs said there would be fewer of barriers to importing or exporting goods across the region by 2020. It’s almost the same concern, 17%, among APEC CEOs.

“I’m not saying I’m not confident about our [chance to join] the Trans-Pacific Partnership. But our domestic trade laws should be aligned with other countries,” he said. (READ: Mama Sita’s president: We’re strangers to the ASEAN market) 

Businessmen have called for changes in the Constitution to make doing business in the country less prohibitive, especially on foreign ownership rules. “But so far, the President [Benigno Aquino III] is not buying that. We have trust issues. Some fear that if they touched the Constitution, someone might touch some political provisions like the term limits,” Cabrera said.

Almost all of the Filipino CEOs do not believe that lowering barriers to trade and investment will have small- and medium-sized enterprises. Only 1% of them said they “strongly agree” that lowering these barriers will harm them. It is 11% among APEC CEOs.

Only 20% of the country’s CEOs also said there would be fewer barriers to skilled people moving across APEC economies. It’s a little higher compared to the 15% confidence level among APEC CEOs.

Only 22% of APEC CEOs said that new technologies – such as robotics, Internet of Things or 3D printing – will transform manufacturing in APEC. It is 2% higher than the confidence level among Philippine CEOs. 

A third (33%) of CEOs in the Philippines “strongly agree” that businesses have significant influence on enlarging the middle class. it is 4% higher than the confidence level among APEC CEOs.

But only 5% of Philippine CEOs “strongly agree” that government policies to promote middle class growth are making significant, tangible progress in the principal APEC economy.

About 33% of both APEC and Philippine CEOs also said that expanded access to high-quality education at all levels will enable inclusive growth in the region.

Upgrading transport system is also a must among 21% of Philippine CEOs and 15% among APEC CEOs. – Rappler.com