The Kaohsiung-Subic Bay-Clark economic corridor is proceeding well, as it seeks to strengthen economic relations between Taiwan and the Philippines, a Philippine government official said in an interview on Saturday.
By linking the three economic and export process zones and allowing easier product and manpower movement, Taiwan and the Philippines would be able to build upon their already successful trade relations, creating a win-win situation, said Armand Arreza, administrator and chief executive of the Subic Bay Metropolitan Authority.
Arreza was part of a delegation that visited Taiwan from Wednesday to Saturday to review the implementation of the economic corridor, an initiative of former minister of economic affairs Ho Mei-yueh (何美玥) in 2005. The Memorandum of Understanding was signed and went into effect last May.
The Philippines and Taiwan have enjoyed a long and harmonious trade relationship, Arreza said, adding that there are more than 45 Taiwanese firms in the Subic Bay Freeport Zone which account for more than 80 percent of the zone's export value.
The establishment of the corridor is expected to resolve some of the issues that have concerned Taiwanese companies and make Subic Bay attractive again, he said.
The Clark Special Economic Zone, a former US Air Force base located just north of Manila, would also become more attractive for Taiwanese companies, especially following Philippine President Gloria Macapagal-Arroyo's announcement of a US$1 billion investment by Texas Instruments earlier this week, Clark Development Corp director Benigno Ricafort said.
Arreza, referring to local news reports that Taiwanese businesses were making an "exodus" from Subic Bay, stressed that the freeport welcomes Taiwanese firms and that it was "delivering more and more incentives to Taiwanese companies."
"This is an international zone for everyone. Companies from South Korea, China and the US have seen the opportunities [for investment.] It's only a matter of time before Taiwanese once again recognize the opportunities," Arreza said.
He did admit, however, that some Taiwanese companies have moved out of Subic Bay, explaining that "it's just a part of the business" since firms are always looking for cheaper labor.
"Today, they're moving to Vietnam, tomorrow they will be in Cambodia. And in the future, they will probably be in Africa," he said.
"But we want to work with Taiwan, and we are always looking to adjust," he reiterated, saying that qualified engineers are in short supply, and that's Taiwan's strength.
If Taiwanese firms take advantage of the Philippine labor force and help to develop its talent and creativity, this would be beneficial for both sides, he said.
Subic Bay and Clark are working hard to improve infrastructure, including building expressways, international airports and power supply networks, Ricafort added.
The Ministry of Economic Affairs announced in a press release that the Philippines has agreed to grant Taiwanese integrated circuit manufacturers tax-free treatment for a period of between six to eight years, as well as 90-day visas and work permits, while lowering electricity costs. The two sides would also collaborate to push for direct flights between Kaohsiung and Taipei and Subic Bay and Clark, and to integrate tourism into the corridor in the future, the ministry said.
According to the ministry, bilateral trade between Taiwan and the Philippines reached US$7.2 billion last year, with Taiwan ranking as the Philippines' sixth-largest trading partner.
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