Banking on the strong confidence in the current administration’s foreign and economic policy, the Philippines and Germany continue to explore areas of opportunity for collaboration in various sectors.

During the 2^nd session of the Philippines-Germany Joint Economic Commission (JEC) held on March 27, 2024, at Sheraton Manila Hotel, German Parliamentary State Secretary Stefan Wenzel of the Ministry for Economic Affairs and Climate Action (BMWK) co-hosted the JEC was Undersecretary for the International Trade Policy Group Allan Gepty of the Department of Trade and Industry (DTI).

In this event, the German–Philippine Chamber of Commerce participated in the JEC and discussed the priority sectors such as energy, infrastructure, technology, investment financing, and skilled labor.

Mindful of the priorities of the Philippines to attain economic recovery and growth, Germany reaffirms its commitment to enhance cooperation in the Philippines. There are already German companies successfully doing business in the country like Siemens Bosch or Lufthansa.

Opportunities in renewable energy and waste management are areas where German companies have great expertise to share.

In the 2^nd JEC session, GPCCI President Stefan Schmitz underscored the enduring and robust bilateral trade and economic relationship between the Philippines and Germany.

“The visit of BMWK State Secretary Wenzel shows a shared commitment to further strengthen the partnership between the two nations, building on the momentum established by President Marcos’ visit earlier this month,” Schmitz added.

Meanwhile, officials from the Department of Trade and Industry showcased the economic relations between the two countries, noting Germany’s position as the Philippines’ 12^th highest trade partner globally and 1^st among European Union countries. Moreover, DTI highlighted that relations were further bolstered by recent visit of President Ferdinand Marcos Jr. in Berlin, Germany last 11-13 March 2024 which brought several agreements and investment pledges from several German companies.

The Anti-Red Tape Authority (ARTA) highlighted its collaboration with the GPCCI through a Memorandum of Understanding (MOU) designed to streamline the operational landscape for German enterprises in the Philippines. Plans for an equipping workshop with GPCCI underscore ARTA’s commitment to improving the ease of doing business for chamber members and the broader German-Philippine business community.

The session also covered comprehensive dialogues on manufacturing and industrial services (including aerospace, electronics, and automotive sectors), energy (with a focus on renewable energy investments), mineral processing, construction and infrastructure, information technology-business processing management, innovation and startups, financing opportunities, and labor collaboration with a focus on the maritime industry and technical-vocational education.

The dialogue also ventured into discussions on the ongoing EU-PH Free Trade Agreement, with DTI Secretary Alfredo Pascual acknowledging GPCCI’s efforts to advocate for the said trade agreement.

“We are thankful to Germany for backing the EU-PH FTA talks – as supported by the German-Philippine Chamber of Commerce and Industry, Inc.” says DTI Secretary Pascual. “They served as an essential role to advocate for the FTA negotiations which impact potential businesses from Germany.”

The event culminated in the signing a MOU between the Philippine Constructors Association, Inc. (PCA) and BFW Germany (represented by GPCCI) on collaboration on enhancing training and development programs of the construction industry in the Philippines.

The recent special survey analysis conducted by the 2023 AHK World Business Outlook with a focus on comparing Philippine results with ASEAN and Worldwide counterparts bared that the German firms doing business in the Philippines remain optimistic about the economic outlook for the country.

Corollary to this, the German businesses demonstrate stronger intentions to increase employment over the next 12 months, especially when compared to their counterparts in ASEAN countries and other global locations according to the AHK World Business Outlook Fall 2023, conducted by the German Chamber of Commerce and Industry (GPCCI) and the German Chambers of Commerce Abroad (AHK).

This special survey evaluated the Philippines’ specific results to those of other AHK entities in the ASEAN region and around the world – comparing potential risks and challenges faced at their respective sites. Additionally, the survey examined investment areas and influential factors, providing a comprehensive view of the business climate.

“Recognizing the Philippines as a key market in the ASEAN region, it was crucial to gauge its standing and identify areas for growth and success,” says GPCCI Executive Director Christopher Zimmer “The satisfactory outlook in the Philippines is encouraging to see as GPCCI continues to provide a platform for German businesses in their market entry in the Philippines.”

ASEAN Level: Energy Costs remain a concern, ask gov’t to explore sustainable sources

While the firms expressed business optimism and eye job creation, they also revealed the challenges of the rising energy costs in operating the business. The analysis reports that the Philippines ranks highest amongst ASEAN countries in positive outlook toward business situation (44%), expectation (63%), and employment intentions (48%). It shows confidence, a positive outlook on business growth, and German-Philippine companies’ intent to hire more Filipino workers.

The survey also evaluated that the Philippines ranks the highest amongst ASEAN countries in considering Energy Prices (38%) as a topmost concern for the respondents. Local economic expectations (22%) are also reflected in the local survey (38%).

“Philippines’ growth and foreign investment face challenges from high energy prices, a concern both locally and globally,” states GPCCI Policy and Advocacy Committee Chairperson Dr. Marian Norbert Majer. “With rising costs, it’s vital for the government to further explore better alternatives like German renewable energy technologies.”

The Global Stage: PH Leads in 12-month Economic Forecast and Employment, Boasts Robust Services and Sales Sectors

In the global landscape, the Philippines has garnered significant attention of an improved business expectations (63%) and local economic expectations in the next 12 months where the Philippines poised as the highest (22%). Furthermore, the country also led in employment intentions, with 48% of participants plan to hire more within the country in the next 12 months.

Moreover, the Philippines has established dominance in the services sector, claiming the highest ranking at 47% as a pivotal factor for investment as well as maintaining a competitive edge in sales and marketing at 50%.

“The global comparison shows more interest in job creation by German businesses in the Philippines” says GPCCI President Stefan Schmitz. “Aside from continuing to liberalize the Philippine economy for foreign players, we urge the Philippine government to take advantage of this momentum by instituting laws that seek to improve skills development of Filipinos such as amending the outdated Apprenticeship system and strengthen enterprise-based education.”

The proposed changes to the Apprenticeship Law, highlighted among President Marcos Jr.’s priority bills, aim to eliminate the cap on apprenticeship duration. This amendment acknowledges that the necessary length of training should be determined based on the specific skill or curriculum requirements.