A silver medalist in the 1995 Bangkok Games, Paz outmaneuvered Gusti Made Oka Sulaksan of Indonesia to snatch the precious medal and proven what could have been an embarrassing performance by the team.
Using a 1.5 meter size sailboard, Paz engaged his three-time Olympian rival in an exciting race at the Subic water. But the crafty 27-year-old marine transportation graduate from Batangas poured on the heat at the most crucial moments of the race to get back at his long-time rival.
Suhaimee Moohammadkasem of Thailand won the bronze by beating Goh Thye Hock of Singapore.
Singapore dominated the event by winning seven of 12 contested events with Thailand coming up with two golds. Malaysia and Myanmar also won one gold each.
For the first time in the history of the event, Indonesia failed to win a single gold.
Although he topped the race, Paz had to endure some scary moments after Gusti filed a protest, claiming Paz used a different brand of foot strap.
Paz heaved only a big sigh of relief when the board of jury upheld the decision of the judges, believing the pair of foot strap did not give him undue advantage against his rivals.
"Napilitan gumamit si Paz na ibang brand dahil hindi dumating yung gamit galing sa Philippine Sports Commission. Hindi namn nagamit yung galing sa PSC. Despite of it, nanalo pa rin si German," said brother coach Richard Paz.
What made the victory more memorable was that it came on the birthday of his late mother, Francisca Paz.
"Kaarawan niya ngayon so inaalay ko ito sa kanyang kaarawan. Siyempre ganon din sa atin mga kababayan," said the 27-year-old Batangueno from Barangay Anilao, Mabini, Batangas.
Paz triumph saved the day for the Filipino sailors who were wiped out in other events.
Reneric Moreno, a town mate of Paz, won the silver in the formula class ruled by Phanutat Ruamsap of Thailand. Tan Weam Haw of Singapore took the bronze.
The last time the Philippines won the gold in sailing was in boardsailing by Junjun Torres and Richard Paz.
Ridgely Balldares and Rommel Chavez placed second in the two-man 470 men division won by the duo of Maung Aung Myen Thu and Sai Pyae Sone Hein of Myanmar.