Embodying resilience in a disrupted world

In brief:

• Volatility is a current feature of the global economy, and CEOs are redesigning their businesses with confidence that they can operate effectively in this environment.

• Companies are adapting hybrid operating structures that balance global scale with regional and local resilience, creating new opportunities and competitive pressures for the Philippines and such other markets that can serve as demand hubs for global companies.

• As companies rethink how to serve Asian markets, the country’s large domestic consumer base, young demographics, English-speaking workforce, and improving infrastructure make it a credible destination for localized and regional operations.

For decades, globalization rewarded scale, cost efficiency and geographic dispersion. That model is now under pressure. Trade tensions, industrial policy shifts, regulatory divergence and geopolitical disputes have turned volatility from an episodic risk into a current feature of the global economy.

What is striking is not that disruption persists, but how decisively corporate leaders respond. According to the latest EY-Parthenon CEO Outlook Survey, 57% of global CEOs expect geopolitical and economic uncertainty to extend beyond the following year, yet confidence is rising, not falling. The CEO Confidence Index climbed to 83 in September, suggesting that leaders believe their organizations are better equipped for this scenario than they were a year ago.

Proactive CEOs embrace disruption as a catalyst for change. Rather than retreating in the face of challenges, over half of surveyed leaders (52%) are increasing their investments to accelerate portfolio transformation, recognizing that adapting to shifting market dynamics is essential for long-term success.

In the Philippines, while CEO optimism may be affected by some other local concerns, the leading CEOs are expected to continue their strategic investments in portfolio transformation and long-term value creation. For instance, in real estate, the leading players are heavily investing to reimagine and redevelop their existing malls and build new ones over the next few years. They are looking to unlock the full potential of their retail spaces by creating greener, more innovative and vibrant spaces for better lifestyle experiences and connections.

In banking, the race toward digital banking continues to heat up as close to half of the population remains unbanked and presents a significant opportunity for both the incumbents and new entrants to the digital banking space. These players are expected to continue making strategic investments to build or acquire new capabilities needed for them to get ahead of competition.

In the restaurant space, the country’s leading quick service restaurant (QSR) chain is expected to continue optimizing its brand portfolio and accelerating its international expansion.

Alongside a focus on transformation, CEOs are also balancing short-term financial performance with long-term value creation. This dual approach helps in navigating immediate challenges while building trust and strengthening stakeholder relationships. In fact, 41% of CEOs are transforming their portfolios specifically to improve financial performance, underscoring the importance of strategic investment in a rapidly changing environment.

For the leading CEOs, volatility is no longer something to be waited out. It is increasingly treated as a strategic input, shaping how firms allocate capital, structure supply chains, and deploy technology.

FROM REACTION TO STRATEGY
One of the clearest strategic responses emerging from the survey is the move toward localization and regionalization. Nearly three-quarters of CEOs report localizing at least part of their production within the country of sale. At the same time, just over half have reorganized supply chains around regional blocks.

This is not a short-term hedge against tariffs or election cycles. Up to 72% of CEOs say localization is now a long-term strategy. The pandemic exposed the vulnerability of overly centralized supply chains, and subsequent geopolitical challenges confirmed it. Many executives concluded that efficiency without resilience is no longer effective.

For the Philippines, this shift creates both opportunity and pressure. As companies rethink how to serve Asian markets, the country’s large domestic consumer base, young demographics, English-speaking workforce, and improving infrastructure make it a credible destination for localized and regional operations. At the same time, competition within ASEAN for investments has intensified.

DIFFERENT GLOBALIZATION
Localization should not be confused with retreat. Few multinational companies are abandoning global scale altogether. Instead, they are pursuing hybrid operating models, maintaining centralized advantages where they matter while decentralizing production, sourcing and decision-making closer to end markets.

In practice, this means that global companies are increasingly viewing markets like the Philippines not simply as export platforms or cost centers, but as demand hubs. Production closer to consumers reduces logistics costs, shortens lead times and mitigates exposure to trade disruptions. It also enables faster response to local preferences, regulatory changes and competitive dynamics.

For companies serving Southeast Asia, regionalization often means designing supply chains that can flex across ASEAN rather than relying exclusively on distant hubs. The Philippines, with its strategic location and improving connectivity, can play a more prominent role in these regional networks, provided policy stability and ease of doing business continue to improve.

LOCALIZATION OF TECHNOLOGY AND DATA
Technology and data stand out as the business areas where localization and regionalization are most advanced. According to the survey, 41% of CEOs are localizing technology and data operations while 44% are regionalizing them, both higher than in any other function.

This reflects a structural change in how scale is achieved. Automation, cloud computing and artificial intelligence have reduced the need for massive, centralized hubs. Digital platforms allow companies to maintain global standards while tailoring products, services, and processes locally.

For the Philippines, this trend is particularly consequential. The country has long played a role in global services, notably business process outsourcing. However, the nature of that role is changing. As companies regionalize technology, data analytics and digital operations, the opportunity shifts from labor arbitrage to capability-building in software development, data management, cybersecurity and AI-enabled services.

Regulation is also an important driver. Governments worldwide are asserting greater control over data, digital infrastructure and technology ecosystems. Localizing data and technology operations helps companies comply with evolving data privacy and digital sovereignty rules. Jurisdictions that offer regulatory clarity and digital infrastructure stand to benefit.

Beyond operational efficiency, localization increasingly serves a reputational and political function. Operating closer to customers and communities improves transparency and strengthens relationships with regulators and policymakers.

In the Philippines, where foreign investment is sometimes subjected to public scrutiny, visible commitment to local employment, skills development and sustainability can materially affect a company’s license to operate. Trust has become an economic asset that can lower operating risk and improve long-term returns.

DEAL-MAKING SHIFT
The landscape of mergers and acquisitions (M&A) is also evolving. The survey also points to sustained interest in deal-making, though with a notable shift in form. Rather than large-scale acquisitions, CEOs increasingly favor alliances, joint ventures and targeted investments, particularly in technology and intellectual property.

This trend allows companies to share risks and access new markets or technologies without the full commitment of ownership. In a regulatory environment that scrutinizes traditional mergers, these partnerships provide a more agile path to innovation and growth.

More than half of CEOs are investing to accelerate portfolio transformation, viewing it as central to long-term value creation. In the Philippines, while we still see more of traditional M&As in the deal market, partnerships sometimes provide faster market entry, better regulatory navigation and access to local knowledge than outright acquisitions. Just recently, we saw one of our largest local conglomerates entered into various partnerships in some of the sectors that they are in — retail, logistics, and healthcare.

We may soon see more of our major local players also entering into strategic partnerships. This preference for modular growth reflects a broader desire for flexibility.

NAVIGATING A VOLATILE BUSINESS LANDSCAPE
By investing in transformation, balancing immediate and long-term goals, embracing localization, and exploring strategic alliances, CEOs are not just surviving but actively shaping the future of their industries. Their proactive mindset and commitment to resilience position them to capture opportunities and drive growth in an ever-evolving business landscape.

Taken together, the trends discussed suggest that the Philippines stands at an inflection point. As global CEOs redesign their strategies for a volatile world, markets that combine demand growth, talent availability and improving digital infrastructure are gaining relevance. The opportunity is there, but capturing it will require policy consistency, continued investment in infrastructure, and a focus on digital capability development.

The lesson is clear: volatility is not a pause button on growth. It is a filter, separating organizations and markets that can adapt from those that cannot. Companies that succeed will be those that treat uncertainty not as an obstacle, but as a design constraint to build with accordingly.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.

Noel P. Rabaja is the Deputy Managing Partner, Strategy and Transactions Leader, and Markets Leader of SGV & Co.