MANILA, Philippines โ Companies involved in German-Philippine business relations report a strong rebound in business conditions and expectations, while confidence in the wider Philippine economy has yet to catch up, according to the Fall 2026 AHK World Business Outlook Survey.
Findings from the survey, conducted by the German-Philippine Chamber of Commerce and Industry (GPCCI), show that 61% of firms now rate their current business situation as good, up from 34% in Spring 2026. Expectations have risen just as sharply: 68% anticipate better business over the next twelve months, more than double the share six months ago, and only 2% expect a decline.
Confidence in the broader economy has not kept pace. Only 27% of respondents expect the local economy to improve, while 24% expect it to worsen. Business decisions reflect a steady rather than expansionary approach. The share planning to cut investment fell from 34% to 5%, but 58% intend to keep investment at current levels and 56% expect employment to remain unchanged.
โThe results are clear. Our member companies have stabilized their operations and are more confident about their own business than they were six months ago,โ said Dr. Christian Scheld, GPCCI President. โThis has been a significant year for German-Philippine relations. Federal President Frank-Walter Steinmeierโs state visit in June and the business delegations GPCCI has welcomed from Germany across several industries confirm that German companies continue to see the Philippines as a place to invest. Turning that interest into investment depends on rules that are applied consistently and decisions that are made on time.โ
DOMESTIC POLICY CONDITIONS RETURN AS THE TOP BUSINESS RISK
Economic policy conditions are once again the most frequently cited business risk, named by 61% of respondents, up from 38% in Spring 2026. Energy prices remain a major concern at 56%, though down from 65%, followed by exchange rates at 42%. Concern over legal certainty more than doubled to 39%, while financing conditions rose from 22% to 34%.
Beyond the standard risk categories, respondents pointed to competition from new market entrants, technological change including artificial intelligence, and political uncertainty ahead of the next national elections.
The findings build on GPCCI’s Philippine Business Environment Report 2026: An Insight Report from the German Business Community in the Philippines, launched in October 2026 at the Doing Business Forum. The report draws on GPCCI’s IMPACT Dialogue Series with eight government agencies, including the Bureau of Customs and the Bureau of Internal Revenue, and sets out member concerns and recommendations for each, together with a spotlight on the EU-Philippines FTA.
โThe most telling result is the distance between how firms see their own prospects and how they see the economy around them,โ says Dr. Marian Norbert Majer, GPCCI Policy and Advocacy Committee Chairperson. โBusiness expectations now stand 63 points above expectations for the local economy, the widest gap since 2020. That points less to company performance and more to the predictability of the operating environment. With economic policy conditions once again the top risk, ease of doing business has to be the priority. The survey tells us where firms feel the friction; the Philippine Business Environment Report traces where it sits, agency by agency, and what would reduce it.โ
FIRMS SEE THE EU-PHILIPPINES FTA AS AN INVESTMENT OPPORTUNITY
The survey also asked companies about the EU-Philippines Free Trade Agreement, on which both sides announced substantial agreement in September 2026. A majority (57%) expect to increase investment in the Philippines within three years of the agreement entering into force, and no respondent expects a decrease. Firms anticipate more imports of EU machinery and components (44%) and higher investment (37%), while one in five (20%) expect to shift sourcing or production from other ASEAN countries to the Philippines.
This comes as companies adjust to global competition. Over half (53%) report rising competition from Chinese companies, and most are responding by increasing product innovation (63%) and seeking new markets (47%); only 3% are withdrawing.
Respondents also identified the domestic factors most likely to limit the agreement’s benefits: customs procedures and clearance times (45%), regulatory inconsistency across agencies and local governments (41%), and tax administration and audit practices (40%).
โOur members are telling us they want to grow here, and the FTA gives them one more reason to do so,โ says Ms. Marie Antoniette Mariano, GPCCI Policy and Advocacy Committee Vice Chairperson. โWith the Philippines in the regional spotlight as ASEAN Chair this year, this is the moment to turn that intent into investment. It is a shared effort. When government and business work side by side on faster customs clearance, consistent rules and fair tax administration, the benefits reach Filipino workers, suppliers and communities, not only the companies themselves.โ
About the Survey
The AHK World Business Outlook Fall 2026 Survey in the Philippines was initiated by the German-Philippine Chamber of Commerce and Industry (GPCCI) and participated in by companies engaged in German-Philippine business relations. The survey was conducted from 5 to 23 October 2026 as part of a global survey of nearly 3,500 companies, gathering responses from 59 companies in the Philippines.
Respondents represented services (49%), manufacturing and construction (29%), and trade (22%). In terms of company size, 44% employ fewer than 100 people, 25% have between 100 and 1,000 employees, and 31% have more than 1,000 employees. The AHK World Business Outlook (AHK WBO) is based on a regular survey conducted by the Association of German Chambers of Industry and Commerce (DIHK) among member companies of German Chambers of Commerce Abroad (AHKs), delegations, and representative offices.
About the Philippine Business Environment Report
The Philippine Business Environment Report 2026 is GPCCI’s insight and advocacy report from the German business community in the Philippines. Anchored on ease of doing business, it covers the EU-Philippines FTA, the country’s position on the World Bank’s B-READY pillars, and the opportunities and challenges members see in their engagement with eight government agencies. The report was launched on 16 October 2026 at the Doing Business Forum.
About GPCCI
The German-Philippine Chamber of Commerce and Industry (GPCCI) is the official representation of German businesses in the Philippines. As part of the global AHK network with 150 offices in 93 countries, GPCCI connects around 300 member companies and supports German firms with market entry, business development, and partnerships across the country.
Started in 1927, the Philippines Graphic is the longest-running printed magazine of national circulation that provides relevant news and features and promotes Philippine literature.
