Because Philippines is not an eligible country in PSN. Us Filipinos have to resort to using HK or SG addresses just to be able to play online in PSN. What's making this really bad is that the organizers at the event don't seem to know about this issue, that there are some countries not covered by PSN. What's even worse is that the disqualified contestant ended up being a finalist in GT Academy Asia 2015, a contest which, as far as I'm aware of, is more legitimate than this event over at Germany.
What I'm saying is that there should be leniency towards countries that are not covered by PSN, so that everyone from every country could compete, because as GT Sport says, "driving is for everyone".
EDIT: If you've read that Yahoo article, you'll see that the contestant does have an email directly from Polyphony stating that he is formally invited (even hand-picked, for goodness' sake) to participate in the event. Just look at it, someone being invited over to a competition, but only to arrive there and be disqualified? That's effed up. There is a clear disconnect between PD and the organizers of the event.