Sales, profits fall amid lockdown

by Louella Desiderio – The Philippine Star, 14 Sep 2021

MANILA, Philippines — A majority of chief executive officers (CEO) reported a decline of at least 10 percent in daily sales and profits with the imposition of a lockdown, but most remain optimistic on revenue growth over the next 12 months, according to a joint survey by PwC and the Management Association of the Philippines (MAP).

The survey also showed more than 60 percent of CEOs are dissatisfied with the vaccination effort in the country, which is seen as an important factor in economic recovery.

The PwC MAP 2021 Philippine CEO survey presented to the media yesterday showed 70 percent of the CEOs said their average daily sales and profits declined by at least 10 percent each time the country is placed under a lockdown.

Conducted from July to August, the survey had 178 CEOs as respondents, the highest number so far.

While most businesses saw a decline in sales and profits due to the lockdown, 74 percent of CEOs are confident their company will experience revenue growth in the next 12 months.

The survey also showed 91 percent are even more confident of the company’s revenue growth for the next three years.

In terms of economic outlook, 78 percent of the CEOs expect the Philippine economy would need over two years to recover.

More than half or 54 percent said they see the Philippines’ gross domestic product growth to be more than four percent for next year.

In terms of factors that would delay economic recovery, 76 percent of CEOs identified the slow vaccine rollout.

The survey showed 66 percent of the CEOs are currently not pleased with the pace of vaccination in the country.

Other factors seen to delay the economy from bouncing back from the impact of the pandemic are political uncertainty (44 percent), reliance on lockdowns (43 percent), threats of new variants (34 percent) and lack of fiscal support for the hardest hit industries (18 percent).

Meanwhile, seen as key drivers of growth include infrastructure development (61 percent), domestic consumption (54 percent), government spending (52 percent), business process outsourcing and services sector (46 percent), overseas Filipino worker remittances (35 percent), foreign direct investments (25 percent) and manufacturing and industry (24 percent).

For the CEOs, the top areas where the government should make investments to support recovery in the next two years are healthcare, infrastructure and education.

MAP president Aurelio Montinola III said increased healthcare capacity is necessary amid the ongoing pandemic.

“The math is there. If you’re vaccinated, you’ll be safe. It’s a pandemic of the unvaccinated. Everybody in the hospital is unvaccinated. But we have not been really able to add much more healthcare capacity, which is what we were told was supposed to happen last year when we started the first lockdown,” he said.

Asked about businesses’ long-term strategy, 74 percent of CEOs said they plan to hike investments in digital transformation, and in cybersecurity and data privacy.

To support organizational growth, 84 percent said they plan to increase investment in leadership and talent development, and 69 percent are looking to spend more on sustainability and environmental, social and corporate governance initiatives.