BERLIN, Germany — President Ferdinand Marcos Jr. has secured more than $4 billion, or approximately P220 billion, in foreign investment pledges from German firms in the healthcare, information technology, agriculture, and manufacturing sectors.
Marcos witnessed the formalization of eight investment agreements during the Philippine-German Business Forum on Tuesday (Berlin time). Three of the agreements were expressions of intent to invest, three were memoranda of understanding, and two were formal memoranda of agreement.
“The part that the private sector plays in our transformation is a central one, and it is going to be extremely important in the future. And I believe that this is the case in the now more inter-connected global economy,” Marcos said.
As the country positions itself as a regional hub for smart and sustainable manufacturing, Marcos revealed his administration’s efforts to “decarbonize” the country’s economy while forging greater cooperation on climate change and energy transition.
A memorandum of understanding was forged for a $3.5-billion investment to develop a fully integrated solar cell manufacturing facility in the Philippines to process high-grade silicon ingots into solar cell silicon wafers.
Likewise, a memorandum of agreement was inked for a P109-million public-private partnership venture to rehabilitate, reclaim, and recultivate 5,000 hectares of degraded farmland.
The initiative is part of a farming project to produce high-quality, healthy organic food at affordable prices sustainably. It also aligns with the country’s objective of achieving food security.
Another memorandum of understanding entails a $710-million investment in a manufacturing facility intended for converting automobiles into high-end armor-protected vehicles and producing military-grade armored personnel carriers tailored for the Asian market.
Data centers
Further, a memorandum of understanding was signed for a $38.25-million investment in establishing data centers that will host a digital insurance platform catering to the Philippines and Southeast Asia. The investment aims to bolster insurance penetration in the region.
A letter of intent was exchanged for an additional $150,000 in investments from a German company to support the development of a partner hospital into a training center.
The center will address the training needs of lower-tier hospitals and establish a curriculum focusing on imaging technology.
Another letter of intent outlines an additional $55,000 investment to develop an innovation think tank hub and spoke model. This initiative is geared towards fostering an inclusive innovation ecosystem.
Marcos emphasized the importance of Germany’s support for the Philippines’ reapplication to the European Union’s Generalized Scheme of Preferences Plus (GSP+) and the resumption of negotiations for a Philippines-EU Free Trade Agreement.
“These are what we hope to continue to resonate in the conduct of the 2nd Session of the Philippines-Germany Joint Economic Commission on 27 March of this year that we will host in Manila,” the President said.
The GSP+ program provides developing countries with duty-free access for 6,274 products to the EU market, while a free trade agreement between the Philippines and the EU would eliminate or reduce tariffs on both regions.
Diversification
“The Philippines and Germany both have aspirations for de-risked and diversified production and market value chains, which future-proof our economies from the geopolitical vagaries of our times,” Marcos said.
He assured German investors that the Philippines is proud to be an attractive location for complementary activities in both the manufacturing and services sectors.
The President said he had a tete-a-tete with German Chancellor Olaf Scholz at the Chancellery in Berlin. They had a “productive and meaningful” meeting. “We also discussed ways to enhance trade and investments,” he added.
As the Philippines’ 11th trading partner in 2023, Germany has emerged as a significant source of foreign direct investment, signaling a robust partnership poised for further growth.
President Marcos highlighted the Philippines’ economic resilience, pointing to a GDP growth rate of 5.6 percent in the last year, outpacing several regional economies.
“Our economic dynamism is driven by strong domestic consumption,” he noted, attributing this to a diverse labor market, a burgeoning services industry, and remittances from overseas Filipino workers.
Marcos asserted that investing in the Philippines has become increasingly appealing, citing recent legal reforms allowing full foreign ownership in strategic sectors such as railways, airports, expressways, telecommunications and renewable energy.
These reforms signal the government’s commitment to fostering a conducive environment for foreign investment.
“We continue to find ways to build upon our strong economic collaboration,” the President affirmed, expressing optimism about elevating bilateral relations to new heights.
The Philippines stands ready to explore avenues of cooperation in manufacturing, construction, infrastructure, IT-BPM, innovation, startups, renewable energy, and minerals processing.
Trade Secretary Alfredo Pascual thanked the German firms for their vote of confidence in the Philippines.
“These agreements not only signify the confidence that German businesses place in the Philippines, but they also underscore the alignment of our economic priorities. Spanning key sectors such as healthcare, manufacturing, innovation, agriculture, and renewable energy, these ventures hold the promise of shared prosperity and sustainable development,” Pascual said.
The PH-DE forum was attended by officials of over 100 German businesses from the electronics, manufacturing, IT, energy, finance, aerospace, telecommunications, infrastructure, and transport sectors.
The forum was co-organized by the Philippine Trade and Investment Center-Berlin in collaboration with the Asien Pazifik Auschuss (APA/Asia Pacific Committee of German Business) and the German Federal Ministry of Economic Affairs and Climate Action.
