‘China Plus 1’ policy among Euro firms to benefit PHL’

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PHILIPPINE companies stand to gain from European companies that are adopting the ‘China Plus-one policy’, as they look to diversify their resources, according to the German-Philippine Chamber of Commerce and Industry (GPCCI).

“We see a lot of efforts with the China plus-one policy here with the geostrategic way of going forward and we do see a lot of chances here for the Philippine companies to have a boost also from companies from Europe, not only from Germany, looking a bit over the edge of China to invest in the future and we are here to help,” Christopher Zimmer, Executive Director of GPCCI, told reporters on the sidelines of the Philippine Outlook 2023 on Thursday.

Zimmer divulged that while he cannot reveal figures and the names of German firms willing to invest or expand in the Philippines, he said the German companies are “selecting now other investment places outside China.”

As to the Philippine sectors that German companies plan to invest in, Zimmer said, “Energy for sure because this is one of the strongholds of the German economy.” Still, the GPCCI official said other sectors that the companies are looking at are: business process outsourcing (BPO), medical companies, and manufacturing, although he said that German companies are on a “high competition” with European firms in terms of manufacturing.

While Zimmer expressed optimism, he stressed that the government should focus on how to implement key economic reforms such as the Foreign Investment Act, among others.

“We are contacted by a lot of companies asking for … so the laws are in place but missing the guidelines of how to implement it, and this is the main focus that we have to address in the future,” Zimmer said.

At a recent chance interview with Philippines’s Trade Secretary Alfredo E. Pascual, the Trade chief underscored the importance of diversifying supply, noting that it’s risky to just rely on a single source country especially with the recent “geopolitical developments.”

For the Philippines’s part, Pascual said the country is looking at capitalizing on investors with production operations in China to have alternative production operations in the Philippines.

“We want them to consider the operation here so we will provide an alternative supply source for their components and inputs to their assembly operation,” he said last December.

Meanwhile, according to a Bloomberg report published on June 20, 2022 which cited a report by the European Union Chamber of Commerce in China, “Some 23 percent of the businesses that responded to the survey are thinking of moving their current or planned investments away from China.”

Moreover, the Bloomberg report noted that the survey showed that Association of Southeast Asian Nations (Asean) and Europe are “among most considered alternatives.”