German firms: Shaky politics could be deal-breaker for promising Philippines

The Philippines has been identified by German businesses as one of the “growth stars” in Southeast Asia, but political and regulatory instability could yet hold back investors from increasing their engagement here.

In a report and survey entitled “Asean 2016 and beyond: New markets, new bases,” German companies operating in the region said that while Malaysia, Singapore and Thailand have all had their turns in the spotlight, the Philippines and Vietnam were “currently shining brighter than the others, with the former enjoying the benefits of six years under a president who pushed a positive reform agenda … ”

German investors, however, expressed concerns about rising political uncertainty in the entire region.

“In the Philippines, meanwhile, the election of an outspoken new president, Rodrigo Duterte, also initially caused some jitters after six years of sound policymaking under (former President) Benigno Aquino III,” the study said.

However, “flip-flops on regulation are probably a bigger concern for most businesses than outright political turmoil.”

Thailand tops the the list of countries in which German companies were planning to establish business operations. The Philippines and Malaysia are also being targeted by more than 20 percent of the German companies surveyed.