German companies remain interested in expanding their investments in the Philippines, but long-term policy certainty will be crucial to unlocking capital for critical minerals, advanced manufacturing, and other emerging industries, Germany’s top diplomat in Manila said.
German Ambassador to the Philippines Andreas Michael Pfaffernoschke said investors need predictable rules, particularly for projects that require decades to recover their costs.
“What you need is certainty. So you are not surprised by a change in conditions two years later, and then your whole investment is no longer commercially viable,” Pfaffernoschke said at a forum organized by the Stratbase Institute and the German Embassy.
He said German companies continue to see opportunities in the Philippines, with potential investments regularly discussed through the Philippines-Germany Joint Economic Commission.
Among the areas drawing attention are critical minerals, where German companies are assessing whether the Philippines can provide a regulatory environment stable enough to support investments with 10- to 25-year horizons.
“There’s definitely an eye on the Philippines to see whether there are possibilities for investments in critical minerals,” Pfaffernoschke said.
The ambassador also pointed to Lufthansa Technik’s expansion in Clark as an example of German companies making long-term commitments in the Philippines.
Germany is monitoring developments involving the proposed Pax Silica initiative and New Clark City, although Pfaffernoschke said there are no specific German investment commitments under the initiative so far.
Participation in Pax Silica would ultimately depend on decisions by individual companies, he said.
Beyond investment, Germany is also pushing for faster progress on a free trade agreement between the Philippines and the European Union, which could improve market access and strengthen commercial ties.
“We have always been supportive of the FTA,” Pfaffernoschke said, adding that Germany remains “very much in favor of a very early conclusion.”
A Philippines-EU FTA could provide German and other European companies with greater certainty and easier access to the Philippine market while potentially improving the country’s position as a production and export base.
For the Philippines, the message from Germany is clear. Investment interest is present, but converting that interest into factories, technology, jobs, and long-term capital will depend on whether investors can count on rules remaining stable well beyond the next business cycle or administration.
