German business leaders have called for the establishment of new partnerships and new economic alliance with the Philippines, stating that Germany is clearly “underrepresented” in the Philippines with untapped investment opportunities for German companies.
GERMAN BUSINESS LEADERS CALL FOR NEW PARTNERSHIP WITH THE PHILIPPINES -- Shown in photo (from left) , Board of Investments (BOI) Undersecretary Ceferino Rodolfo, Dr. Gunther Kegel, CEO Pepperl+Fuchs AG & ZVEI, Dr. Dan Lachica, SEIPI President, Mrs. Silke Sichter, ZVEI Senior Manager ; (from right) Commercial Counsellor Nicanor Bautista, Trade and Industry Secretary Alfredo E. Pascual, Ambassador Irene Susan Natividad, and DTI Undersecretary Kim Bernardo-Lokin discuss new cooperation following the Philippine-German Investment Forum in Berlin on July 3, 2023.
This was raised by members of the German Chamber of Commerce and Industry (DIHK) and Germany’s Electronics and Digital Industries Association (ZVEI) during the Philippine-German Investment Forum in Berlin on July 3 as part of the three-week investment roadshow by the Department of Trade and Industry (DTI) in Europe.
Dr. Volker Treier, member of DIHK, emphasized in an opening message at the forum that now is the time to strengthen Philippine-German ties and to explore cooperation amongst like-minded partners such as the Philippines.
Dr. Gunther Kegel, ZVEI president, urged that Germany must establish new partnerships and find new economic allies. Referring to Germany’s stated goals of “automation, electrification and digitization.”
The German businessman stressed that Germany is clearly “underrepresented in the Philippines”, and that untapped investment opportunities exist for German companies.
In a statement, the DTI said that senior officials of at least 50 companies, including those from Siemens AG, Gamigo Group, Nivus GmbH, Continental AG, Lufthansa Group, Messer Group, Allianz SE, Telstra Limited, Bayer AG, Bauer Spezialtiefbau Gmbh, Synolytics GmbH, Pepperl + Fuchs and Voith GmbH attended the forum, which was organized by the Philippine Trade and Investment Center (PTIC) in Berlin in partnership with DIHK and the Asia Pacific Committee on German Business.
Pascual, together with Board of Investments (BOI) Managing Head Ceferino Rodolfo, and Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) President Dan Lachica, met with Kegel, who is also CEO of Pepperl+Fuchs.
During the meeting, they discussed the possible outsourcing collaboration in the field of electronics manufacturing between ZVEI, SEIPI, and the Philippine government in creating Original Design Manufacturer (ODM), Original Equipment Manufacturer (OEM), and electronics manufacturing outsourcing opportunities in the Philippines.
The discussion on collaboration between Germany and Philippines industries was in light of the continuing challenges of the lack of skilled labor, the rising cost of production, and the diversification and de-risking aspirations in Germany.
ZVEI is one of the most important industrial associations in Germany representing the interests of a high-tech sector covering over 1,100-member companies. They employ around 90 percent of the employees and staff of the electrical industry in Germany. Its members include global players and medium-sized and family-owned companies. The sector also has 879,000 employees in Germany with a combined turnover in 2021 of approximately EUR 200 billion.
Meanwhile, Pepperl+Fuchs, a member of ZVEI, is a Tier I automotive supplier involved in electrical explosion protection and sensor technologies. The company’s Factory Automation Division is a manufacturer of industrial sensors. It makes a range of inductive, capacitive, photoelectric, and ultrasonic sensors, identification systems, barcode and camera systems, rotary encoders, position measurement systems, cord sets, and other accessories. Pepperl+Fuchs employed over 6,000 in 2022 with revenues amounting to EUR 1 billion.
Furthermore, Luc Quisthoudt, Continental Temic Microelectronic GmbH’s Vice President Operations for Advanced Driver Assistance Systems and Autonomous Mobility, provided insights about the company’s various operations in the Philippines, which spans over 40 years.
These include its 100 percent-owned Philippine subsidiary—Continental Temic Electronics, Phils. Inc. (CTEPI) located in Calamba, Laguna. Established in 2004, their local subsidiary currently manufactures radar and wheel speed sensors for the Korean and Japanese markets. Quisthoudt said that CTEPI is committed to staying in the Philippines, highlighting that the Filipino workers are highly skilled, motivated, and tech-savvy.
In the meeting, Pascual emphasized the huge potential of the Philippines to create an enabling business environment for a manufacturing industry given its strategic location that covers the ASEAN market and nearby countries.
Pascual highlighted the Philippines’ economic gains that make the country an ideal market for German exports and a strategic hub for German manufacturing firms that intend to access the ASEAN region.
"From a GDP growth rate of 5.7% in 2021, our country registered an impressive growth rate last year, 2022, of 7.6%—one of the highest in the ASEAN region," Pascual said.
Further, amongst ASEAN economies, the Philippines grew the fastest for the first quarter of 2023 at 6.4 percent as compared to Indonesia’s 5 percent, Vietnam’s 3.3 percent, and Singapore’s 0.1 percent growth.
Pascual also cited several factors that make the Philippines a viable investment destination, such as the country’s large domestic market of 113 million, young and skilled workforce, strategic geographic location in East and Southeast Asia with access to significant shipping lanes, and abundant natural resources, including renewable energy potential of about 250 GW, with ample reserves of green metals such as nickel, copper and cobalt.
