PH biz leaders: Corruption presents biggest hurdle to economic recovery

MANILA, Philippines—More than 60 percent of the country’s top businessmen said the government should prioritize fighting corruption over other measures to attract foreign investments, reflecting a long-standing sentiment in a country long believed to be plagued by moral rot.

The sentiment was expressed in results of a joint annual survey by PWC Philippines and Management Association of the Philippines (MAP) which found corruption to rank highest in 67 percent of 119 respondents—top Philippine business leaders—as a barrier to economic recovery from pandemic decline.

“In the past three years, issues such as undocumented health spending, misallocated health care funds and procurement of outdated equipment surfaced and have not been resolved,” read the briefer for the PWC-Map 2022 CEO survey conducted from July to August.

Earlier this year, the Philippines was characterized as a “significant decliner” in Transparency International’s global corruption perception index in 2021, placing 117th out of 180 countries, down two notches from its ranking in 2020.

“While anti-corruption initiatives were not laid out during the President’s State of the Nation Address (SONA) in July, the President himself said that the use of government funds will follow the law,” the briefer read further.

Other concerns

The other top concerns of the business leaders are lower foreign and domestic investments (38 percent), political uncertainty (30 percent), uncontrolled inflation (29 percent), rising oil prices (28 percent), and lower quality of education (27 percent).

Factors which received less than a quarter of response from the respondents are rising government debt (17 percent), higher interest rates (14 percent), Russia-Ukraine conflict (13 percent), threat of new coronavirus variants (8 percent), delayed government releases (8 percent), lack of fiscal support for hardest hit industries (6percent), and others (3 percent).

Pandemic recovery

In the same survey, 52 percent of the respondents said it will take more than two years for the Philippine economy to recover, implying that it will take around twice as long as compared to the government’s own economic forecast.

“In terms of the concerns of the business leaders, they have identified the higher prices and the supply chain issues, as well as labor constraints as possible continuing problems even after the pandemic,” said Mary Jade T. Roxas-Divinagracia, PWC Philippines Deals and Corporate Finance managing partner.

Roxas-Divinagracia said these concerns were coupled with other global issues, as well as higher inflation, higher interest rates, and higher fuel costs.

“All these things combined are actually giving some of our business leaders (sleepless nights),” she said further.

Earlier in May, then Socioeconomic Planning Secretary Karl Kendrick T. Chua expressed optimism that the Philippine economy will return to pre-pandemic growth this year.

Chua cited the Philippines solid macroeconomic fundamentals, adding that it provided enough buffers and resources to withstand any shocks.

TSB