MANILA CITY, PHILIPPINES — Department of Trade and Industry (DTI) Secretary Fred Pascual lauded the enduring and robust partnership between the Philippines and Germany during the 2nd Joint Economic Commission (JEC) meeting, held on 27 March 2024.

“Germany has consistently ranked as a top trade and investment partner, and 2023 was a record-breaking year. Foreign direct investment (FDI) from Germany soared to a staggering USD 149.89 million, the highest since 2005. This momentum continued with Germany emerging as the leading source of foreign-approved investments in 2023, contributing a remarkable PHP 393.99 billion,” Secretary Pascual highlighted.

Likewise, the German side noted the consistent increase in bilateral trade turnover in recent years and recognized the Philippines as a production and sales hub for German companies in ASEAN and the Asia-Pacific region.

In photo: DTI Secretary Pascual and DTI Undersecretaries (L-R) Ceferino R. Rodolfo, Allan B. Gepty, and Rafaelita M. Aldaba

Priority Areas of Cooperation

The JEC meeting, chaired by DTI Undersecretary for International Trade Allan B. Gepty and Federal Ministry for Economic Affairs and Climate Action (BMWK) Parliamentary State Secretary Stefan Wenzel, focused on strong economic cooperation in manufacturing and industrial services, energy, construction and infrastructure, information technology-business process management (IT-BPM), innovation and startups, vocational education and training, and labor.

Both sides identified opportunities to expand bilateral cooperation, particularly in minerals processing and investment financing.

Over 70 representatives from government agencies and business sectors from both countries participated in the meeting.

Among the representatives from the business sector were the Philippine Constructors Association Inc. (PCA), IT and Business Process Association of the Philippines, Aboitiz InfraCapital, Inc., Aboitiz Power Corporation, San Miguel Corporation, German-Philippine Chamber of Commerce & Industry (GPCCI), Bauer, Bosch, Continental, KfW IPEX-Bank Asia Ltd., Lufthansa Technik Philippines, Mercedes-Benz Group Services Philippines Inc., Start2 Group, Triconti ECC Renewables Corporation, and wpd AG.

Germany was also represented by German Trade and Invest, its foreign trade and inward investment agency.

In photo: Delegations from the government and business sector of the Philippines and Germany

“Our JEC is an excellent platform to exchange ideas, explore opportunities, and address challenges and ways forward,” Undersecretary Gepty said, as he addressed government and business representatives during their discussion on strengthening cooperation in sectors of mutual interest.

German companies Lufthansa Technik Philippines, Continental, and Bosch recognized the strong value proposition of the Philippines’ manufacturing and services sector relative to its peers.

Additionally, they praised the high-skill level of Filipino workers, especially in IT-BPM, vocational education, and labor and commended the government’s efforts to improve the ease of doing business.

Meanwhile, wpd AG affirmed strong optimism for the Philippines’ potential and acknowledged the support from the Department of Energy (DOE) and the DTI’s Board of Investments (BOI) for the companies’ solar and offshore wind projects.

DOE Director for Energy Policy and Planning Bureau Michael O. Sinocruz stressed that they have been discussing with relevant agencies on how to improve the permitting process, grid connection, ports and other matters related to offshore wind projects. Noting the German companies’ strong interest and participation in the Philippines’ renewable energy projects, the DOE invited them to establish a manufacturing plant for parts and components in the country.

Philippine Overseas Construction Board Executive Director Doris U. Gacho expressed the Board’s interest in collaborative projects with Germany. These projects are envisioned to advance the implementation of the Philippines Construction Industry Roadmap (PCIR) 2020-2030, promote Philippines construction and engineering services, and capacitate the country’s construction workforce.

Aligned with these goals, the PCA and the BFW Construction Training Institute NRW signed a Memorandum of Understanding (MOU) during the JEC meeting. The MOU aims to promote the German Dual-Training System within the Philippines, bring German innovation in technology in the Philippines, and enable the exchange of best practices through study visits.

MOU signing between PCA Executive Director Engr. Ibarra Paulino and BFW, which is represented by GPCCI Executive Director Mr. Christopher Zimmer. From L to R: PCA President Engr. Ronaldo R. Elepaño Jr., DTI Undersecretary Allan B. Gepty, DTI Secretary Fred Pascual, BMWK Parliament State Secretary Stefan Wenzel and Ambassador Andreas Pfaffernoschke

Moreover, BOI Director for Resource-Based Industries Service Raquel B. Echague and Department of Environment and Natural Resources-Mines and Geosciences Bureau Engr. Bernardo V. Bitanga presented the value proposition for minerals processing in the Philippines. They also proposed cooperation projects such as technical assistance for establishing an iron-making facility.

DTI Undersecretary for Competitiveness and Innovation Rafaelita M. Aldaba provided updates on the ongoing cooperation initiatives of the Department with Siemens on Industry 4.0-related activities and Start2 Group on strengthening the Philippine startup ecosystem.

In addition, DTI Undersecretary for Industry Development and Investment Promotions Group Ceferino S. Rodolfo addressed the value proposition of KfW IPEX-Bank Asia Ltd. by highlighting the Philippine companies’ engagement in major infrastructure projects holding opportunities for investment financing.

Lastly, Technical Education and Skills Development Authority Executive Director Charlyn B. Justimbaste reported developments on the implementation of MOUs signed in January 2024 with GPCCI, Siemens Inc., and Festo Inc. during Germany Federal Foreign Minister Annalena Baerbock’s visit to the Philippines.

Economic Landscape and Policy Direction

DTI Undersecretary for International Trade Allan B. Gepty highlighted the Philippines’ resilience and pointed to the country’s position as the fastest-growing economy across Southeast Asia. He also underlined the country’s 5.6% growth rate in 2023 and continued growth projections ranging from 5.8% to 6.3% in 2024 despite global economic headwinds.

“Trade policy is a potent tool to address challenges like climate change.  Under the Philippine Development Plan (2023-2028), we’re positioning the Philippines as a prime destination for investments, especially in environmental, social, and governance (ESG) initiatives,” Usec. Gepty explained.

“We are also committed to advancing purposive, assertive, and forward-looking free trade agreements (FTAs) that will expand economic space and increase the country’s participation in global supply chains,” he added.

According to Parliament State Secretary Wenzel, global developments have made Germany aware of the vulnerability of international supply chains. He expressed the German Federal government’s intention to diversify and reduce one-sided dependencies, which has led Germany to view the Philippines as a promising partner.

Undersecretary Gepty affirmed the Philippines’ commitment to an open and integrated global market and emphasized the country’s support to domestic industries and strengthening national security. He also underscored the importance of sustainability, inclusive growth and development, the rule of law, and security in the Philippines’ economic partnerships.

Building on the Momentum

The JEC meeting was held following President Ferdinand Marcos Jr.’s official visit to Germany in March 2024 and the recent announcement of the free trade agreement negotiations resumption between the Philippines and the European Union.

“The meeting revealed the growing potential of our economic relationship with Germany and the remarkable synergy between our economies. Through the JEC, we are building our shared future–one that leverages our strengths and our united goal of bringing inclusive and sustainable growth for all,” said Secretary Pascual. ♦

Date of release: 03 April 2024

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