It is amazing the difference a one-and-a-half hour plane ride can make. Taiwan and the Philippines are neighbors, and in some places resemble each other climatically and geographically. However, when one boards a plane at Taiwan Taoyuan International Airport and disembarks at Ninoy Aquino International Airport in Manila, one has crossed a massive gulf in historical legacy, economic development and government effectiveness.
Taiwan and the Philippines became colonies of Japan and the US respectively at roughly the same time, 1895 and 1898, and were both abandoned by their colonial rulers after the end of World War II. Before their colonial eras, both Taiwan and the Philippines were governed as provinces from Beijing and Mexico City/Madrid, and enjoyed relative autonomy outside the major cities.
Despite these superficial historical similarities, the two countries developed in vastly different directions. Japan’s colonial era in Taiwan was characterized by the construction of infrastructure that acted as a base upon which the Chinese Nationalist Party (KMT) later built Taiwan’s economy after fleeing China in 1949. The Japanese built roads, universities, hospitals, a postal service, railroads, ports and a modern economy based on a modern government. They fought the Aborigines in the mountains and crushed all rebellions against their rule, unifying Taiwan for the first time in its modern history.
The Japanese had a far different impact on the Philippines during their short but brutal occupation in World War II, leaving many painful memories and accomplishing nothing to help the country.
In the Philippines, the US first kicked out the Spanish, enlisting the help of former Philippine president Emilio Aguinaldo, a revolutionary and independence activist in the late 19th century. However, when he realized the US just wanted to take the place of the Spanish, he led his armies in a war against the US that resulted in the brutal killings of anywhere between tens of thousands and 1 million Filipinos. The population of the Philippines was devastated and the US took on a military dictatorship role, something that did not really happen in Taiwan on a similar scale until the KMT initiated the White Terror period in the late 1940s.
True development passed the Philippines by, and that can be seen today in the way the country’s economy is run. The Asian Development Bank said in 2008 that 12 percent of the Philippines’ GDP was made up of remittances by Overseas Filipino Workers (OFW), and that number has grown in the past four years, with OFW remittances surpassing US$465 million at the same time exports are slowing, contributing to a stable 4 percent GDP growth rate last year.
Taiwan, on the other, still makes the lion’s share of its earnings from exports, something the Philippines cannot match. Both countries differ in terms of infrastructure, too. In central Manila, buildings that were bombed during World War II still stand empty, while Taiwan has embarked on a mass rapid transit building spree in all its major cities.
The Philippines has much to gain from working closely with Taiwan and vice versa. Although talk of a Taiwan-Philippines free-trade agreement (FTA) has gone on for years, nothing has ever come of it, even though Taiwan has already inked something similar to an FTA with China — the Economic Cooperation Framework Agreement (ECFA). Manila places more emphasis on economic deals with Singapore and Seoul, but Taiwan is a lot closer geographically, and an FTA could benefit the export markets of both. Taiwan could import raw materials from the Philippines and export manufactured goods, something that is notoriously expensive there because of all the tariffs involved.