The Philippines and Germany agreed on Thursday to put a multimillion-dollar row over an airport extension behind them and improve their economic, political, trade and defence cooperation.
"This shouldn't be an obstacle for our economic collaboration," said German Foreign Minister Guido Westerwelle, the first German cabinet minister to visit the Philippines since the dispute erupted in 2002.
"We see a lot of potential between our countries and it is on us now to use this opportunity," he said in Manila.
Philippine Foreign Secretary Albert del Rosario said its economy, one of the fastest-growing in the region and has made the Philippines very attractive for new investments since then.
"This single case should not prevent German companies from working with their Filipino partners to enable them to exploit opportunities in energy, manufacturing, [outsourcing], tourism and other infrastructure projects," he said.
Tensions flared between the Philippines and its largest European trading partner in 2002 when the government of then-president Gloria Macapagal-Arroyo nullified the 1997 contract awarded to a German-led consortium to build and operate a third terminal at Manila's international airport, citing irregularities.
The government in 2003 expropriated Terminal 3 of the Ninoy Aquino International Airport from the consortium, whose leader, Germany's Fraport AG, has been suing to recover 425 million dollars ever since.
The dispute strained diplomatic relations, and was a factor in preventing high-level visits from Berlin, a diplomatic source told dpa on condition of anonymity.
The last top German official to visit the Philippines was former foreign minister Joschka Fischer in 2000.
Del Rosario on Thursday hinted at some progress in the talks.
"While we have not come up with a magical formula that would quickly make the issue disappear, I have come to an understanding with Minister Westerwelle that we are looking forward to a positive resolution of the Fraport issue," he said.
"We are optimistic about this considering the openness that both sides have expressed regarding possible options that we could explore."
The Philippine government has placed 175 million dollars in escrow for the developers as ordered by a local court amid international arbitration.
The countries' bilateral trade was worth 3.1 billion dollars in 2011, and Germany is the biggest source of tourists to the Philippines.