The country’s business environment remains favorable to German-Philippine firms, which remain optimistic about business development over the next 12 months. They view the Philippines as a promising growth market amid a backdrop of global and local uncertainty.

Based on the latest AHK World Business Outlook Survey in the Philippines, done by the German-Philippine Chamber of Commerce and Industry (GPCCI) from 17 March to 11 April 2025, more than half of the respondents, or 58 percent, rated their current business situation positively, while 65 percent anticipate improved business development within 12 months.

The survey covered more than 130 companies related to German-Philippines business relations.

This continues the upward trend from the 2024 survey, with companies showing strong interest in increasing their presence in the Philippine market.

Notably, 44 percent of firms said they plan to raise their local investments, while 47 percent foresee employment growth.

On the other hand, 49 percent 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,” said GPCCI Policy and Advocacy chairperson Dr. Marian Majer.

“But with that optimism comes the clear need for policy consistency and regulatory stability to sustain momentum,” he added.

Navigating risks

Despite the upbeat outlook, the survey also highlighted several concerns that remain at the top of companies’ minds.

Economic policy uncertainty emerged as the leading risk, driven by challenges such as inconsistent regulations, bureaucratic inefficiencies and unpredictable policy shifts.

Businesses also pointed to fluctuating demand and rising raw material costs as critical issues that could impact stability and planning.

Other significant worries include the impact of US tariffs, the potential for a global recession, tax audits, the upcoming Philippine elections, political instability, and port congestion.

In addition to local challenges, companies are closely watching global developments that could influence business decisions over the medium term.

Trade conflicts and protectionist measures were cited as the top concerns, alongside inflationary pressures and uncertainty in monetary policy frameworks.

Digital shift in a flash

Rapid digital transformation — particularly the rise of artificial intelligence — is also seen as a disruptive force that could reshape industries.

“Businesses are taking a cautious view, balancing opportunity with the need to manage risks,” Marie Antoniette Mariano, GPCCI president, stressed for her part.

“Supporting long-term business confidence will depend on consistent, forward-thinking policies that reduce uncertainty and encourage investment. There’s a strong expectation that continuity and clarity in economic direction will remain a priority in the coming months,” she stressed.

On the topic of US tariffs, many companies reported no direct operational impact.

However, others pointed to a range of positive and negative effects.

On the upside, firms noted greater trade possibilities between the EU and Southeast Asia, increased access to alternative markets, and opportunities to diversify sourcing.

While on the downside, they cited supply chain disruptions, increased import costs, and canceled product deliveries as significant challenges.