More than half of German companies responding to a Manila survey expressed optimism about their local business prospects, expecting an even stronger Philippine economy in the next 12 months, survey results showed on Thursday.
The Spring 2025 AHK World Business Outlook Survey conducted by the German–Philippine Chamber of Commerce and Industry showed 58 percent of the German firms view their current situation positively, up from 50 percent in the Spring 2024 edition of the survey, and unchanged from the Fall 2024 survey.
The survey also found that 65 percent expected improved business development over the next 12 months. That was higher than the 61 percent in the Spring survey last year and the 60 percent in the Fall of 2024.
However, 43 percent of those surveyed listed shifting economic policy conditions as a top concern, followed by fluctuating demand, 42 percent, and volatile price of raw materials, 38 percent.
The German-PH chamber said the companies highlighted other challenges, such as global trade worries.
44% to boost investment
Notably, 44 percent of the firms said they plan to raise their local investments, the same proportion in the Spring 2024 survey,
but lower than the 55 percent in the Fall 2024 survey.
This year, 47 percent said they expect growth in employment, a lower proportion from the 62 percent in both the Fall and Spring 2024 surveys.
About 49 percent believe that local economic conditions will remain stable in the year ahead.
The chamber said the survey findings also highlighted the potential of the EU-Philippines free trade agreement to influence corporate decisions about expansion, local investment, and workforce development in the country.
Weighing opportunity vs risk
Despite this positive outlook, Marie Antoniette Mariano, president of GPCCI, said, “Businesses are clearly taking a cautious view, balancing opportunity with the need to manage risks.”
The chamber said survey respondents cited additional concerns, including US tariffs, a potential global recession, ongoing trade tensions, tax audits, the upcoming Philippine elections, and political instability.
Regarding the US tariffs, 38 percent of companies reported no direct operational impact, while 34 percent cited a minor negative impact.
On the upside, the surveyed firms noted greater trade possibilities between the European Union 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.
The chamber said companies are closely watching global developments that could influence business decisions over the medium term.
Policy uncertainty
The chamber said economic policy uncertainty emerged as the leading risk for local concerns, 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.
“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,” Mariano said.
The AHK World Business Survey covered 130 respondents from the Philippines between March 17 and April 11, 2025.
AHK stands for German Chambers of Commerce Abroad, delegations and representative offices, which conduct surveys and collect data from member companies about their business outlook.
