Business leaders urged to pivot toward adaptability as ‘flux' becomes constant

By Beatriz Marie D. Cruz, Senior Reporter PHILIPPINE BUSINESS leaders must treat economic headwinds as an operating reality rather than a temporary disruption and adopt strategies that can withstand structural shifts, top executives said. 'For years, the objective was optimization. Today, the objective is adaptability,' Management Association of the Philippines (MAP) President Donald Patrick L. Lim said during the 24th MAP International CEO Conference on Tuesday. Alma Rita R. Jimenez, chairman of the MAP CEO Conference Committee, said businesses have no choice but to operate in the age of 'flux,' driven by major shifts across industries. 'The landscape may change or evolve, but the common truth remains: leaders are operating in a world characterized by continuous changes, overlapping disruptions, and increasing complexities,' said Ms. Jimenez, who is also the chief executive officer (CEO) of Health Solutions Corp. About 83% of CEOs and business leaders are optimistic about their industry's prospects over the next year 'amid an unpredictable business environment,' according to a survey by Isla Lipana & Co./PwC Philippines in partnership with MAP. Philippine CEOs said their top concerns in the next few months include regulatory uncertainty (93%), climate change (93%), geopolitical conflict (92%), and technology disruption (85%). Rising energy costs, slower economic growth, and the Philippines' transition toward upper-middle income status are affecting corporate strategies, SM Investments Corp. President and CEO Frederic C. DyBuncio said. 'These are not just economic indicators. They shape the decisions we make in our boardrooms, where we invest, how we manage risk, and how we prepare for what comes next,' he said in a video message. Mr. DyBuncio said that today's challenges require a focus on long-term investments, urging businesses to look outside traditional growth hubs such as Metro Manila. For First Philippine Holdings Corp. President Francis Giles B. Puno, companies should start building resilience long before disruptions occur. 'Perhaps we have misunderstood inflection points. We think of them as moments that happen to us — a geopolitical shift, a changing market, but perhaps the real inflection point is the moment leaders choose to act before the world leaves them with no choices,' he said in a video message. BusinessWorld President and CEO Miguel G. Belmonte said economic disruptions are pushing business leaders to adapt to structural shifts while pursuing sustainable growth, transformation and long-term value creation. 'Flux is not a temporary disruption to be managed, it is the environment in which we operate,' he told the forum. As the region faces geopolitical headwinds from US-China tensions, ASEAN+3 Macroeconomic Research Office Senior Economist Catharine Kho said the Philippines must diversify its economic ties to build resilience against external shocks. 'The best way to handle that is to build on our resilience [and] ensure that we're sufficiently diversified, such that if there's any shock coming from any derailment of the relationship between the bigger powers, we're not affected that significantly,' she told the forum. Ms. Kho also said that continued investments in human capital and infrastructure development would help economies weather any disruption. Global uncertainties are also heightening cybersecurity risks, especially telecommunications firms, Singapura Finance Ltd. Independent Director Lionel Yeo said. 'It's an imperative because we are living in such an insecure world now. We know from developments in the world that we are up against some very serious threat actors,' he told the forum. BDO Capital & Investment Corp. President Eduardo V. Francisco said high interest rates and the weaker peso continue to affect investor hesitancy. 'CEOs are still on a wait-and-see, and it's hard to make investments because we're still expecting interest rates to go up, and the peso has depreciated,' he told BusinessWorld on the sidelines of the forum. 'I'm still optimistic because, I think, well, except for the war, but other than that, we were already managing inflation, it was on the way down.' The Monetary Board on Aug. 27 hiked its benchmark interest rate by 25 basis points to 5%, as a preemptive move needed to address inflation risks from the super El Niño and wage hikes. Mr. Francisco also noted that sustained anti-graft measures, as well as the recent arrest of former Speaker Ferdinand Martin G. Romualdez for plunder, would help improve business sentiment. 'It's a good sign to the foreign investors that this government is serious in fighting corruption,' he said.