A recent survey of the German–Philippine Chamber of Commerce and Industry states that although German businessmen are confident with the Philippine economic developments still the high price of electricity remains one of their top concerns.

The recent AHK World Business Outlook Spring 2024 Survey in the Philippines, initiated by GPCCI and is participated almost 70 companies related to German-Philippines business relations, high power cost was identified as key risks that could impact future economic growth, aside from economic policy conditions, high energy prices, and challenges related to supply chain disruptions and infrastructure.

“To capitalize on the current economic optimism, it's imperative that the Philippine government work closely with businesses to resolve these identified challenges.” says GPCCI Board Director and Policy and Advocacy Chairperson, Dr. Marian Norbert Majer.

“Addressing these issues can help create a more predictable and favorable business environment and ensure that this bullish momentum translates into substantial outcomes that will help the Philippines attain its sustained economic growth,” he added.

Just today, the Manila Electric Company (Meralco) announced that it will increase rates for this May bill by 46.21 centavos to P11.4139 per kilowatt-hour (kWh), which translates to an increase of P92 for residential customers consuming 200 kWh.

The Meralco advisory said that the power rate increase was due to the uptick in generation charges at 44.55 centavos per kWh, on the back of higher costs from the Wholesale Electricity Spot Market (WESM) and Power Supply Agreements (PSAs).

In a 2023 report, the Philippine Center for Investigative Journalism stated that the Philippines was among the highest energy prices in Southeast Asia, next to Singapore, with P9.86 per KWh.

Malaysia, which is a tough competitor of the Philippines when it comes to foreign investments, is the lowest with P1.42 per KWh.

Despite this, German firms aired on the said survey that they remain bullish in the local economic development in the next 12 months with both investment and employment figures showing continuous optimism.

“It's encouraging to see such confidence from businesses involved in German-Philippine relations, forecasting a bullish local economy. This optimism surely points to a thriving environment in the Philippines for both investment and job creation over the next 12 months," according to GPCCI President Marie Antoniette Mariano.

"The series of events in the first quarter of 2024, including German Foreign Minister Annalena Baerbock's visit in January, President Marcos' subsequent visit to Germany in early March, and the convening the 2nd Joint Economic Commission in mid-March, have evidently played a crucial role in bolstering the bilateral relations between the Philippines and Germany,” she added.

The Spring 2024 survey reports that half (50 percent) of the German-Philippine businesses are still optimistic in their business situation.

The same trend is reported on company expectations, which showed positive results, with a majority (61 percent) of the responding firms forecasting confidence in business development for the next 12 months.

Notably, the local economic projections in the next 12 months significantly increased by 17 points at 55 percent. Investments and employment also followed this trend with increased projections at 44 and 61 percent, respectively (from 39 percent and 54 percent in Fall 2023).

The participating sectors are from the services (59 percent), trade (14 percent), and the manufacturing or construction sectors (27 percent).

About 58 percent of the respondents have less than 100 employees, 25 percent have 100 to 1,000 employees, and 17 percent have more than 1,000 employees.

In terms of company type, 48 percent of the respondents are local companies without a branch in Germany, 28 percent are subsidiary/branch/representations of a German company, 9 percent are international companies without a branch in Germany, 8 percent are international companies with a branch in Germany, and 6 percent are local companies with a branch in Germany.