The country’s business environment remains favorable to German-Philippine firms, which continue to express optimism about developments over the next 12 months, viewing the Philippines as a promising growth market amid global and local uncertainty.

According to the latest AHK World Business Outlook Survey in the Philippines — conducted by the German-Philippine Chamber of Commerce and Industry (GPCCI) from 17 March to 11 April 2025, with participation from more than 130 German-Philippine companies — 58 percent rated their current business situation positively, while 65 percent anticipate improved business development in the year ahead. This continues the upward trend from the 2024 survey, with companies showing strong interest in expanding their footprint in the local market.

Notably, 44 percent of firms plan to increase local investments, and 47 percent foresee employment growth. Meanwhile, 49 percent believe that domestic economic conditions will remain stable over the next 12 months.

“This continued confidence in the Philippine market reflects the deepening strength of German-Philippine business ties,” said 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."

Navigating risks

Despite the upbeat outlook, the survey highlighted key concerns. Economic policy uncertainty topped the list, driven by inconsistent regulations, bureaucratic inefficiencies, and unpredictable policy shifts. Companies also cited fluctuating demand and rising raw-material costs as potential threats to stability and planning.

Other significant worries include the impact of US tariffs, the potential for a global recession, tax audits, upcoming Philippine elections, political instability, and port congestion. On the global front, trade conflicts, protectionist measures, inflationary pressures, and unclear monetary policies remain critical. Rapid digital transformation — especially the rise of artificial intelligence — is seen as a disruptive force that could reshape industries.

"Businesses are taking a cautious view, balancing opportunity with the need to manage risks,” said Marie Antoniette Mariano, GPCCI President. “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 months to come."

On US tariffs, many firms reported no direct operational impact, but others noted both positive and negative effects — ranging from greater EU-Southeast Asia trade opportunities and market diversification, to supply-chain disruptions, higher import costs, and canceled deliveries.

EU-PHL Free Trade Agreement

The potential EU-Philippines Free Trade Agreement (FTA) continues to influence corporate strategy. Companies indicated that the FTA factors into decisions on local manufacturing, sourcing, and operations, and could support workforce growth through hiring and skills development if finalized.

"The EU-Philippines Free Trade Agreement is poised to drive economic growth and enhance the business landscape in the Philippines. In the face of global trade realignments, the FTA can offer businesses from the EU a timely opportunity to strengthen their supply chains, reduce exposure to external shocks, and plan more sustainably for the long term,” GPCCI Executive Director Christopher Zimmer said.