German companies doing business in the Philippines report stable business conditions, but adopted a more cautious outlook even as they called for stronger government policy response amid uncertainties and cost pressures.
Findings from the Spring 2026 AHK World Business Outlook Survey, conducted by the German–Philippine Chamber of Commerce and Industry (GPCCI), revealed that a majority of firms report stable operations, while expectations are becoming more measured, with 51 percent anticipating no change in business conditions over the next 12 months.
At the same time, sentiment toward the broader economy has weakened. A majority of respondents expect more challenging local economic conditions over the next 12 months, indicating growing concern over the external and domestic environment.
This shift is further reflected in business decisions wherein 34 percent expect to recalibrate local investments, while 53 percent expect employment levels to remain unchanged, signaling a more cautious approach to expansion.
“German companies continue to demonstrate resilience in the Philippines, maintaining stable operations despite a more complex global environment,” said Dr. Christian Scheld, GPCCI President. “In times like these, it is essential to reinforce policy predictability. A clear and reliable business environment remains a key factor in maintaining investor confidence in a crisis scenario.”
Business risks
The survey, released by the German-Philippine Chamber of Commerce and Industry, also showed that external factors continue to dominate the risk landscape. A clear majority (65%) of respondents identify energy prices as their top concern, more than double the figure recorded in Fall 2025. Supply chain pressures and raw material costs follow as the second and third most cited concerns, each cited by roughly half of respondents.
The ongoing conflict in the Middle East was identified as a key contributor, with an overwhelming majority (85%) of respondents noting rising input costs as a direct consequence and nearly two-thirds citing supply chain adjustments as well.
On trade policy, the impact is felt primarily through rising costs. A strong majority (78%) of respondents report increased costs linked to tariffs, logistics, and compliance requirements as the dominant effect of current trade policy developments, with supply chain delays and higher regulatory requirements also cited as contributing factors.
“While business operations in the Philippines remain stable for our member companies, our latest survey shows that strategically, companies are becoming more cautious on investments and hiring amid rising global uncertainties and cost pressures.” said Dr. Marian Norbert Majer, GPCCI Policy and Advocacy Committee Chairperson. “At this critical time, it is essential that government prioritizes easing administrative processes and reducing regulatory friction, ensuring transparency, consistency, and accountability, to help businesses sustain their resilience amid evolving global conditions. “
Diversification and flexibility
In response to geopolitical uncertainty, firms are prioritizing flexibility over structural commitment. Nearly four in five respondents are exploring new sales markets, and about seven in ten are expanding or planning to expand their supplier networks, reflecting a deliberate effort to broaden their operational base amid shifting global trade dynamics. At the same time, structural adjustments remain limited. Three-quarters of respondents have no plans to relocate operations, and a majority are not planning large-scale inventory or investment increases. On U.S. trade policy specifically, nearly half of respondents report no direct relevance to their Philippine operations.
“German businesses in the Philippines have consistently demonstrated their long-term commitment to this country, and we continue to see that reflected in today’s results,” said Ms. Marie Antoniette Mariano, GPCCI Policy and Advocacy Committee Co-Chairperson. “Sustaining that commitment requires more than intent. It calls for a governance environment that is transparent, consistent, and truly responsive, one that meets businesses halfway and enables those who are here for the long term to grow with confidence.”
The survey was conducted from 16 March to 10 April 2026 as part of a global survey of nearly 3,200 German companies across 93 countries, gathering responses from 68 companies in the Philippines
Respondents represented key sectors including services (49%), manufacturing and construction (29%), and trade (22%). In terms of company size, 47% employ fewer than 100 people, 35% have between 100 and 1,000 employees, and 18% have more than 1,000 employees. The AHK World Business Outlook (AHK WBO) is based on a regular survey conducted by the Association of German Chambers of Industry and Commerce (DIHK) among member companies of German Chambers of Commerce Abroad (AHKs), delegations, and representative offices.
