Recent Taiwan-focused literature in the Philippines has mostly been about the risks to the 150,000 Filipino workers based in the country and Manila’s possible military entanglement in a Taiwan contingency due to the Philippines’ mutual defense pact with the US. While these geopolitical quandaries are consequential, due regard should also be given to how relations developed between the Philippines and Taiwan, especially after then-president Tsai Ing-wen’s (蔡英文) administration initiated the New Southbound Policy in September 2016.
The regional policy’s rationale is similar to South Korea’s New Southern Policy, launched in 2017, which aims to hedge against overdependence on China and develop a diversified economic portfolio by deepening relations with other countries and regions such as Southeast Asia. Like South Korea, Taiwan has a New Southbound Policy Office, with a mandate to focus on four major areas of cooperation: economic collaboration, talent exchange, resource sharing (healthcare, culture, tourism, technology, agriculture) and regional connectivity.
The Taiwanese government has minced no words about its intent to decouple from China. Taiwan’s trade and tourism from China have declined, while trade and tourism from ASEAN countries have substantially increased.
In 2022, Taiwan’s outbound investment to Southeast Asia (US$5.2 billion) exceeded that to China (US$5 billion). To boost its international profile and exercise its agenda-setting powers, Taiwan has started to make use of “conference diplomacy” through platforms such as the Ketagalan Forum and Yushan Forum.
With the Philippines, bolstered by more aggressive investment missions and an upgraded bilateral investment agreement in 2017, Taiwan-approved investments in the Philippines soared to US$73.34 million last year, up from US$27.7 million in 2016, making Taiwan the Philippines’ eighth-largest investor. Most Taiwanese investments in the Philippines have gone into real estate, manufacturing (including electronics and semiconductors), retail and financial services.
Taiwanese companies have also begun prioritizing the recruitment of employees from New Southbound Policy countries. Under the policy, the Philippines became a main destination for Taiwanese banks and the Philippines became a top investor in Taiwan.
Major Taiwanese companies such as the New Kinpo Group, MSK Group and Sercomm are poised to expand their production facilities and manufacturing operations in the Philippines. Given Taiwan’s leading position in agriculture, agricultural cooperation has taken a positive turn as it has implemented agricultural demonstration sites in the Philippines to showcase high-end Taiwanese technologies.
Buttressed by Taiwan’s visa-free policy for the Philippines, Filipino tourists to Taiwan more than doubled to 350,490 last year from 172,000 in 2016, making the Philippines Taiwan’s ninth-largest tourist market, surpassing China.
In the age of social media, this kind of sociocultural and people-to-people interactions help project Taiwan’s soft power further into the Philippines. Similarly, only 229,303 Taiwanese tourists visited the Philippines in 2016, before peaking at 327,273 in 2019 before the COVID-19 pandemic, positioning Taiwan as the Philippines’ fifth-largest tourist market.
It is no surprise that air traffic has increased between major Taiwanese and Philippine cities such as Taipei, Kaohsiung and Manila, with more routes set to be opened between Kaohsiung and Clark, and Taipei and Puerto Princesa on Palawan Island.
Similarly, the number of Filipino workers in Taiwan has risen 90 percent to 150,000 last year, from 78,000 in 2016, while their remittance to the Philippines grew from US$319 million in 2016 to US$904 million last year. Filipinos are the third-most populous group of foreign residents living in Taiwan and Taiwan is considering extending work visas and granting permanent residency for Filipino migrant workers.
Taiwan has doubled down on its public diplomacy efforts in the Philippines. It has increased its scholarships for Filipinos and offered research grants and medical short-term study programs. Taiwan has also provided language training for internships for exceptional Filipino high-school students with Taiwanese tech companies.
Additionally, Taiwan has extended agricultural internship programs for young Filipino farmers at agricultural research stations in Taiwan to be trained on advanced agricultural technology, skills and techniques.
In healthcare, Philippine pharmaceutical and biotechnology companies are creating more linkages with Taiwanese companies. Efforts are also under way to deepen semiconductor and start-up cooperation through trade shows and industrial summits, while there are prospective joint ventures on uncrewed vehicle systems.
Educational cooperation has likewise made major headway. As of 2021, 1,253 memorandums of understanding had been signed between Taiwanese and Philippine universities. Taiwanese universities have even forged a strategic alliance open contract with Philippine universities, which aims to open Chinese-language classes, internships and employment opportunities in Taiwan for Filipinos.
As the nearest Southeast Asian country to Taiwan, more could be done in terms of synergizing the New Southbound Policy with the Philippine government’s economic agenda, such as the Philippine Development Plan and the Strategic Investment Priority Plan, which includes good governance, green ecosystems, industrial value-chain gaps and the “Fourth Industrial Revolution.” Taiwan could also follow the lead of the US’ plans to invest US$1 billion in the Philippines in digital and artificial intelligence upskilling, cybersecurity training and electric vehicles. With the recent trend in global developments, Taipei and Manila should coordinate on economic security, and supply chain and climate resilience given that the nations are on the front lines of natural disasters.
Aaron Jed Rabena is professorial lecturer at the Asian Center in the University of the Philippines and a visiting scholar at National Chengchi University’s Taiwan Center for Security Studies.
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