Philippine companies are preparing for an economic recovery and are prioritizing the use of technology to meet an expected uptick in business activity this year, but many face a shortage of financial resources needed to meet these new challenges.
Thus showed the latest International Business Report released on Monday by consulting and audit firm Grant Thornton, reflecting similar trends among almost 5,000 companies it polled in 29 nations around the world that midsized businesses are displaying “reserved optimism” about this year’s prospects.
“The latest data demonstrates to us that mid-market business leaders globally are being very realistic about the challenges that the first half of 2021 will bring, but they are facing this uncertainty with sensible pragmatism and resilience,” P&A Grant Thornton chair and CEO Marivic Españo said in a statement.
In preparation for recovery, many local companies are leveraging off technology “to support organizational recovery” and looking at workplace safety and new workplace regulatory requirements.
The poll noted that 39 percent of companies around the world were planning or implementing strategies precisely around these areas, with their next priorities being determining what financial resources would be needed (33 percent) and narrowing down product or service areas to focus on (31 percent).
According to the poll, businesses find that funding investments and meeting continuing operating needs during the pandemic remained a challenge.
In particular, the shortage of finance remained a significant concern for businesses, with 47 percent of firms identifying it as a business constraint over the next 12 months, increasing by 6 percentage points from the number set in the first half of 2020 when the full scale of the pandemic was becoming evident.
This was despite record monetary easing and fiscal support provided by the government to businesses in the country as they attempt to alleviate cash flow constraints arising from COVID-19.
The local Grant Thornton head noted, however, that preparations for ramping up business operations were being made against the backdrop of last year’s sharp decline in activity as evidenced by the steepest economic contraction ever recorded in the country’s history.
“While the outlook is showing real improvement with both economic optimism and expectations around revenue and profits on the rise, it is important to note the context of these increases,” Españo said. “In many cases the improvements we are seeing are due to firms benchmarking the next 12 months against the very depressed economic environment of 2020 due to COVID-19.”
“Even with vaccines being rolled out in some markets, the reality is it will still be some time before we return to anything approaching normality,” Españo said. “Many businesses have already made transformational changes to their operating models and investments in this area and this shows no sign of abating as everyone looks to ensure they are able to compete in a post-COVID world.”
As published in Philippine Daily Inquirer, dated 26 January 2021