German-Philippine firms remain optimistic about business development over the next 12 months, viewing the Philippines as a promising growth market amid a backdrop of global and local uncertainty. While companies acknowledge persistent challenges—such as shifting economic policies, fluctuating demand, and volatile raw material prices—they are also eyeing opportunities for expansion and investment.
Additional concerns include US tariffs, a potential global recession, ongoing trade tensions, and the upcoming Philippine elections. The survey also highlights the potential of the EU-Philippine Free Trade Agreement to influence corporate decisions around expansion, local investment, and workforce development. These insights come from the Spring 2025 AHK World Business Outlook Survey recently conducted by the German–Philippine Chamber of Commerce and Industry (GPCCI).
German firms Confident in Philippine business prospects
More than half of the respondents (58%) rated their current business situation positively, while 65% anticipate improved business development over the next 12 months. This continues the upward trend from the 2024 survey, with companies showing strong interest in increasing their presence in the Philippine market. Notably, 44% of firms said they plan to raise their local investments, while 47% foresee growth in employment. Meanwhile, 49% believe that local economic conditions will remain stable in the year ahead.
“This continued confidence in the Philippine market reflects the deepening strength of German-Philippine business ties.” Says Dr. Marian Majer, GPCCI Policy and Advocacy Chairperson. “But with that optimism comes the clear need for policy consistency and regulatory stability to sustain momentum.”
On the topic of US tariffs, many companies reported no direct operational impact. However, others pointed to a range of effects—both positive and negative. On the upside, firms noted greater trade possibilities between the EU and Southeast Asia, increased access to alternative markets, and opportunities to diversify sourcing. On the downside, they cited supply chain disruptions, increased import costs, and cancelled product deliveries as significant challenges.
Growing interest in the EU-PH Free Trade Agreement
The potential of the EU-Philippines Free Trade Agreement (FTA) continues to shape corporate strategies. Many companies indicated that the agreement plays a role in their expansion or investment considerations, particularly when evaluating local manufacturing, sourcing, and operational plans. There is also strong interest in how the FTA could support workforce growth, with several firms noting that it may lead to moderate increases in hiring and skills development if the agreement progresses.
“The EU-Philippines Free Trade Agreement is poised to drive economic growth and enhance the business landscape in the Philippines.” says Mr. Christopher Zimmer, GPCCI Executive Director. “In the face of global trade realignments, the FTA can offer businesses from EU a timely opportunity to strengthen their supply chains, reduce exposure to external shocks, and plan more sustainably for the long term.”
