Confidence is fragile among Philippines-based CEOs as megatrends, including technological disruption and climate transition, converge. More than half of the Philippines-based CEOs (54 percent) note that they are concerned their businesses will not be viable beyond the next decade without reinvention.
Yet at the same time, almost all (97 percent) Philippines-based CEOs note they have taken steps to change how they create, deliver and capture value in the past five years. And over that timeframe, 86 percent have taken at least one action that had a large or very large impact on their company’s business model. These are according to the Philippines report of PwC’s 27th Annual Global CEO Survey. The Philippines was among the 105 countries and territories included in this latest survey, which gathered the insights of a total of 4,702 CEOs.
The reinvention imperative
While CEOs are taking action, they are faced with a number of challenges. Almost three fourths (71 percent) cite the lack of workforce skills as inhibiting their ability to reinvent their business model to at least a moderate extent, 69 percent point to a lack of technological capabilities in their company, and 75 percent point to competing operational priorities.
As the pressure to adapt rises, more CEOs will prioritize big moves to support business model reinvention. Although this is necessary, it’s rarely sufficient. PwC research finds that top companies focus not only on their business model, but also on the operating and technology models that enable it—and they do so continuously. The mindset change and management challenges involved are huge. To win, leaders must consider a broader range of initiatives—and apply them in combination. Investing in service partnerships to close operating-model capability gaps and keeping pace with technology advancements allow the company to focus on what it does best.
Despite the Philippines-based CEOs’ concern about their long-term business viability, the proportion who believe global economic growth will improve over the next 12 months has grown to more than half (57 percent), slightly higher than the Asia Pacific average (40 percent). They consider the US and China as critical for their growth prospects in 2024. PwC Philippines Deals and Corporate Finance Managing Partner Mary Jade Roxas-Divinagracia notes: “In the years leading up to the survey period, the country achieved consistent GDP growth rates of around 6–7 percent annually. And in the first quarter of 2024, we saw a year-on-year growth of 5.7 percent. The Philippines has undertaken efforts to improve its investment climate and attract foreign direct investment. This sustained growth and the positive investment climate could have promoted optimism among CEOs regarding both local and global economies.”
The AI opportunity
CEOs overwhelmingly see GenAI as a catalyst for reinvention that will power efficiency, innovation and transformational change. At least 60 percent of Philippines-based CEOs anticipate impacts within three years—including impacts to the workforce (vs. at least 57 percent in Asia Pacific). They also expect better outcomes for their business—57 percent expect GenAI to positively impact revenue and profitability (vs. 49% in Asia Pacific).
PwC Philippines Chairman and Senior Partner Roderick Danao shares: “Just this month, we’ve seen the heightened interest of business leaders in GenAI during the Manila speaking tour of Scott McLiver, Partner and Asia Pacific Leader in GenAI. Their enthusiasm over the opportunities for growth and innovation that GenAI brings demonstrates their understanding of the need for fundamental reinvention of their businesses.”
But while CEOs are increasingly looking to the transformative benefits of GenAI, the great majority say it will require workforce upskilling (80 percent). They have also expressed concern about an associated rise in cybersecurity risk (69 percent vs. 49 percent in Asia Pacific) and misinformation (57 percent vs. 44 percent in Asia Pacific).
PH CEOs report progress on climate priorities
Philippines-based CEOs are making progress in turning their commitments into action. Three fourths (75 percent) have either begun or completed steps to improve energy efficiency, while 74 percent report having made similar strides when it comes to innovating new, climate-friendly products, services or technologies.
On the other hand, 68 percent note having made progress on or completed initiatives to protect their physical assets and/or workforce from the physical impacts of climate risk. But 26–31 percent noted no plans to pursue other types of action related to just transition and nature.
Philippines-based CEOs cite regulatory complexity (54 percent vs. 63 percent in Asia Pacific) and lack of climate-friendly technologies for their sectors (54 percent vs. 59 percent in Asia Pacific) as the biggest barriers to be overcome. CEOs are beginning to take on the economic barrier, with four in ten reporting that they have accepted lower hurdle rates for climate-friendly investments than for other investments (43 percent vs. 51 percent in Asia Pacific).
Roderick Danao concludes: “The impetus to reinvent is intensifying. Many of our country’s business leaders are now working on accelerating the transformation of their business models, investing in technology and their workforce, and managing the risks and opportunities related to climate change. In this era of continuous reinvention, CEOs have vast opportunities to reshape their organizations, and themselves, to thrive on disruption, and transform aspirations into realities.”
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