Despite challenges in doing business in the country, German firms have identified areas for potential investments that are seen to drive creation of local employment, the German–Philippine Chamber of Commerce and Industry (GPCCI) reported Thursday, Nov. 16.

The Fall 2023 AHK World Business Outlook Survey conducted by the GPCCI – AHK Philippinen last October revealed that German businesses are seeing promising local business prospects but would like to prioritize projects that will address higher employment demand.

These areas include sales and marketing; services; and research and development. The survey outlook also cited these areas as having the most potential to drive local employment. 

“Our recent survey shows an adequate satisfaction of German businesses in the Philippines matched with careful considerations and notable challenges,” GPCCI President Stefan Schmitz said.

“We have observed these developments this year in our events, partnerships, and dialogues with both public and private stakeholders and we are happy that more German companies would like to contribute to job creation,” he added.

The Fall 2023 survey reported that 50 percent of the German-Philippine businesses are still optimistic about their business situation following the Spring 2023 forecast, which showed a significantly stable trend compared to the years prior with a “better” result at 62 percent.

However, the prices of energy, lack of skilled workers, and demand are top risks affecting employment demand.

“We can see that while many of our respondents want to employ more, we see that the lack of skilled workers remains to be one of the identified top issues,” GPCCI Director and Policy and Advocacy Chairperson Dr. Marian Norbert Majer said.

Majer added that the GPCCI is asking “the government to look at strategies and policies that promote skills development in our country that can both benefit local and foreign employment opportunities [for] Filipinos.”

The survey showed that market size/market development; local economic policy framework; and diversification are the dominant factors that the companies are considering in making investment decisions.

Further, the survey said the EU-Philippine Free Trade Agreement (EU-PH FTA) has a significant impact on companies with operations in the Philippines.

These companies also raised current export challenges, such as cumbersome customs procedures; tariffs and quotas; and technical trade barriers, like conformity testing and certification as affecting their operations.

Meanwhile, they also expect to benefit from the EU-PH FTA in terms of the expansion and maintenance of their current investments; gaining a competitive market advantage; and exploring new investment prospects.

Opportunities in trade in goods, trade in services, and supply chain optimization were also highlighted.

“We are pleased to see that our respondents are motivated by the possibility of the Philippines entering into a Free Trade Agreement with the European Union,” said GPCCI Executive Director Christopher Zimmer.

“The first part of the dialogues is currently in motion, and we hope to hear the good news about the scoping procedure and that negotiations will commence in 2024," he added.