German businesses operating in the Philippines are watching the US trade policy closely, with a significant number citing American tariffs as a growing concern.
Results of the latest AHK World Business Outlook-Spring 2025 show that 38 percent of surveyed companies report no impact yet from new US trade measures, but 34 percent identified a minor negative impact.
While not all firms feel an immediate effect, 17 percent of the respondents noted that the looming risk of trade fragmentation and higher import costs, as well as product cancellation fees and supply chain disruption, are shaping future strategies.
Meanwhile, 11 percent of the surveyed firms saw more trade possibilities, eyeing diversification and alternative markets, especially in Southeast Asia and the EU, as buffers against potential escalation in trade tensions.
The survey, conducted from March 17 to April 11, 2025, gathered insights from 130 companies in the Philippines with ties to German businesses.
“Businesses are clearly taking a cautious view, balancing opportunity with the need to manage risks. 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,” said GPCCI president Marie Antoniette Mariano.
Looking ahead, German-Philippine firms identified three key risks over the next 12 months—economic policy uncertainty at 43 percent, demand fluctuations at 42 percent and rising raw material prices at 38 percent.
The survey noted that the risks reflect a cautious stance, even as many German firms remain optimistic about local business prospects.
About 65 percent of respondents expect business development to improve in the coming year, while 44 percent plan to increase local investments and 47 percent anticipate boosting employment.
Despite regulatory and geopolitical headwinds, the numbers underscore the Philippines’ continued appeal as a growth hub.
On the global front, 68 percent of the firms highlighted trade barriers and conflicts as the topmost challenge to persist until 2030, while 42 percent cited inflationary pressures, and 36 percent identified digital transformation.
Meanwhile, the potential EU-Philippines free trade agreement is seen as a game-changer, with a majority indicating it could shape future hiring, sourcing and expansion strategies.
