German Ambassador to the Philippines Andreas Michael Pfaffernoschke
German companies are showing interest in investing in the Pax Silica Initiative in Clark but are seeking a clear and stable Philippine legal framework to ensure that investments, particularly in critical minerals, are protected over the long term and are not affected by changes in government policies.
German Ambassador to the Philippines Andreas Michael Pfaffernoschke told reporters at the high-level conference “Towards a Peaceful and Sustainable Future: Addressing the Climate-Conflict Nexus in ASEAN” held Monday in Makati that investors generally need predictability in government policies.
“What is important for all investment, which is not specific to critical minerals, you need, of course, a long time span of clear expectations. So, a legal framework, which gives you the certainty for an investment that could allow for 10, 20, maybe 25 years? This is not a short-term investment, critical mineral extraction and processing that takes a lot of time. So, what you need is certainty,” the German Ambassador said.
Predictability, he said, is necessary for investors across all sectors and should not be limited to critical minerals, Clark, or the Pax Silica initiative.
Bullish
Even as he called for greater certainty and predictability in the country’s legal framework, Pfaffernoschke said he sees potential for German mining companies to invest in the Philippine critical minerals sector.
“If the Philippine government sets up the right framework conditions for critical minerals, I’m pretty sure German companies would also be more attracted to invest in the Philippines.”
While there are no concrete investment plans yet, he said German companies are genuinely interested in exploring opportunities in the Philippines.
“Definitely there’s an eye on the Philippines to see whether there are possibilities for investments in critical minerals,” he added.
Pfaffernoschke cited Lufthansa Technik’s long-term contract for its maintenance, repair and overhaul (MRO) operations in Clark as an example of the type of investment certainty companies seek.
“Theirs is a contract that runs for many, many years … for clear conditions … and that is what you need as an investor, that you are not surprised by a change in conditions 2 years later, and then your whole investment is no longer commercially viable. So that is what you need, and I think that applies also for the critical minerals,” he said.
Lufthansa, in partnership with local firm MacroAsia Corp., is investing USD400 million to expand its existing aircraft MRO operations in Parañaque and establish operations in Clark.
Pfaffernoschke noted that the Lufthansa MRO operation may not be located within the 1,600-hectare Pax Silica site and is not directly related to artificial intelligence. However, he said it represents a significant investment that demonstrates Germany’s and German companies’ commitment to the Philippines and the region.
JEC, FTA
Meanwhile, the Philippines and Germany are pursuing Joint Economic Cooperation (JEC), which covers investment opportunities in both countries.
While the JEC has yet to result in concrete investments under its framework, Pfaffernoschke said German companies remain strongly interested in the Philippine market.
“Let me assure you that German companies continue to have a huge investment interest in the Philippines and continue to consider the Philippines as a very interesting market.”
He also noted that bilateral trade between the two countries has improved.
Another factor boosting Germany’s business interest in the Philippines is the ongoing negotiations for a Philippines-European Union Free Trade Agreement, which is expected to be completed before the end of the year.
“We have been supportive of the FTA, and we continue to hope that negotiations will be closed very soon. But as you know, the negotiations are not done by the member states, but by the European Commission, so the details are worked out between the Philippine government and the European Commission. I can only say politically, we are much very much in favor of a very early conclusion. But of course, the devil is in the details, and it depends on how this devil is being sorted out, right?,” he said.
