Philippines gets $5 billion in investment pledges from German, US companies

March 14, 2024 - 9:02 AM
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German Chancellor Olaf Scholz and Philippine President Ferdinand Marcos Jr. hold a press conference in Berlin, Germany, March 12, 2024. (Reuters/Liesa Johannssen)

The Philippines secured about $5 billion worth of investment pledges from German and American firms this week in sectors such as healthcare and energy, potentially big wins for the country as it competes with others in the region for foreign capital.

President Ferdinand Marcos Jr, who is on a three-day working visit in Germany, secured $4 billion worth of investment pledges from German companies, the trade ministry said on Wednesday, on the heels of over $1 billion in commitments from American firms.

U.S. Commerce Secretary Gina Raimondo concluded a two-day trade mission to the Philippines on Tuesday with executives from 22 companies including United Airlines, Alphabet’s Google, Visa, and Microsoft.

The Philippines has long struggled to lure foreign money because of issues like red tape, weak infrastructure and policy uncertainty, and has lost business to other Southeast nations that offer better tax breaks and lower operational costs.

Private equity firm KKR & Co KKR.N will invest $400 million in telecoms tower operations and expansion in the Philippines, the U.S. Department of Commerce said on Wednesday.

READ: KKR to invest $400 million in Philippine telecoms tower business

Ally Power, a startup, announced a $400 million deal with power utility Manila Electric Co to build a hydrogen and electric refueling station.

Microsoft is working with the Philippine central bank and the ministries of budget and trade to identify how its AI products can help boost productivity, the commerce department said.

In Germany, the Philippines signed eight investment pacts covering solar cell manufacturing, modification of automotives, and production of military-grade armoured personnel carriers.

Other agreements include potential development of a hospital training centre, an innovation hub and digital healthcare partnership, and farmland rehabilitation.

The Philippines attracted $12 billion of foreign direct investments in 2022, trailing Vietnam’s $15.7 billion and Indonesia’s $21.1 billion, Association of Southeast Asian Nations website data shows.

($1 = 55.2330 Philippine pesos)

— Reporting by Neil Jerome Morales; Editing by Jacqueline Wong, Stephen Coates and Bernadette Baum