Trade and Industry Secretary Alfredo E. Pascual expects EU companies, particularly German-owned, to tap the Euro300-billion EU Global Gateway Fund to participate in the Philippines’ infrastructure projects under the Private Public Partnership (PPP) arrangement.
Pascual raised this opportunity in his keynote speech at the German-PH Chamber of Commerce & Industry Inc. (GPCCI) Luncheon Meeting: ‘2022 Philippine-German Business Forum’ on Tuesday, Nov. 29.
Pascual shared that during his recent bilateral meeting German Minister Robert Habeck for Economic Affairs and Climate Action in Singapore, they both expressed support of the Euro300 billion EU Global Gateway Fund.
“This available financing will allow EU companies including Germany’s private sector to participate in the various ongoing infrastructure developments here in the Philippines,” said Pascual telling the German businesses in the country that the new administration of President Ferdinand Marcos has revived the PPP arrangements for infrastructure projects in the fields of water storage and management, renewables, waste management, logistics and transportation, and disaster mitigation.
“Germany has the proven track record in the above-mentioned areas of work,” he said.
Pascual further noted that PPPs offer a wide array of economic and social benefits as they improve access to public services and as incubators for private sector innovation.
The trade chief also made a pitch for a potential engagement between our two countries in the sunrise industry of electric vehicles (EVs). “The German government and the German private sector can tap the Philippines’ significant green metal reserves of nickel and copper. Doing so would ensure the supply of these critical resources in support of your country’s full-electrification objectives for your automobile industry by 2030. In exchange, the Philippines will benefit from Germany’s significant experience and expertise in nickel and copper downstream processing,” he said.
In addition, he drew attention for the IT-enabled business process outsourcing resources in the Philippines to assist Germany’s digitization objectives.
A number of German industry leaders are currently operating their own shared services centers (SSCs) in the Philippines including Bosch, Deutsche Bank, Daimler, Fresenius, Lufthansa, Boehringer, and Merck. These SSCs are manned by Filipino professionals.
In fact, German technology giant Siemens is DTI’s partner in the establishment of Industry 4.0 Pilot Factory. Launched just last September with the Center for Artificial Intelligence (AI) Research, this pilot factory forms part of the Philippines’ goal to become an AI Center of Excellence in Southeast Asia.
The pilot factory is intended to serve as a hub of cutting-edge solutions. It is a space for MSMEs, researchers, and universities to learn robotics, automation, and smart factory. It can also be a co-working space and prototyping sandbox. Siemens has established a similar facility in Singapore.
Pascual will visit the Siemens Industry 4.0 factory in Amberg, Germany next week. “I am told it showcases the successful marriage between digital and brick & mortar operations in one manufacturing facility,” he said.
Germany has been an important trade partner of the Philippines for many years. In 2021, Germany ranked as Philippines’ 12th major trading partner, 7th export market, and 13th import source.
Philippine exports to Germany grew by 23.6 percent from $2.38 billion in 2020 to $2.94 billion in 2021 on growth in the exportation of digital monolithic integrated circuits, semiconductor devices, storage units, and video projectors.
Philippine imports from Germany also expanded, by 4.15 percent from $1.97 billion in 2020 to $2.05 billion in 2021. This can be attributed principally to the growth in the importation of materials, accessories and supplies for the manufacture of dice; medicaments; vaccines; and materials for the manufacture of semiconductor devices.
“These trade data show the trajectory of our two countries’ economic relationship. I take this opportunity to underscore the Philippine government’s intention to offer our country as a manufacturing investment destination and an ITBPO partner to German companies, especially those already doing business in the Philippines. We seek the potential expansion of German firms already in the Philippines,” he said.
He urged German investors to invest in the Philippines’ industrialization strategy, which focuses on the reconfiguration of four clusters—Industrial, Manufacturing and Transportation cluster, Technology, Media, and Telecommunications cluster, Health and Life Sciences (HLS) cluster, and Modern Basic Needs and Resilient Economy cluster.