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Friendship and goodwill: Revisiting Philippine-Taiwan relations

Published

By Fidel V. Ramos
Former Philippine President

 (First of Two Parts)

Fidel V. Ramos

Fidel V. Ramos

Last 29 March to 01 April 2017, FVR led a delegation of 50 sportspeople, businessmen,  and professionals, along with members of the Taiwanese Chamber of the South Philippines (TCSP) headed by its founding president, Chen Wen-Ju (“Tiger” Wood Chen), that visited Taiwan.

The combined Philippines-Taiwan delegation also participated in the 9th Taiwan-Philippines Friendship Golf Tournament (FVR Cup), an annual event that provides opportunities for business networking, new products search, as well as for sports competition, and people-to-people bonding.

It was a propitious time for this particular goodwill renewal visit to our closest neighbor because of changes in government administration with the:

(1) Installation of new Taiwan President (Ms.) Tsai Ing-wen last 20 May 2016 to replace former President Ma Ying-jeou.

(2) Inauguration of new Philippine President Rodrigo Roa Duterte last 30 June 2016 to replace former President Benigno S. Aquino III.

(3) Replacement by Chairman Angelito Banayo of former Chairman Amadeo Perez, Jr. of the Manila Economic and Cultural Office (MECO).

Per records from MECO in Taipei, our good neighbor Taiwan has remained a major investor throughout Southeast Asia with a strong presence in the Philippines, particularly in the electronics, telecommunications, information technology, construction, textiles, mining, banking, electric power, food processing, pharmaceuticals,  and tourism industries. According to the World Trade Organization, Taiwan is the world’s 24th largest economy, and the Philippines’ 6th largest trading partner.

Taiwan currently hosts some 135,000 Filipino workers (compared to 120,000 in 2016) and has consistently been a source of substantial development cooperation assistance, particularly in industrial design, agriculture, aquaculture, weather forecasting, and technical skills training.

As usual, we rendered courtesy calls in Taipei on high-ranking government officials, notably President (Ms.) Tsai Ing-wen and Foreign Minister David Lee, former president Ma Ying-jeou, former vice president Vincent Siew, incumbent Kuomintang Chairman (Ms.) Hong Hsiu-tsu, and the Taiwan External Trade Council (TAITRA).

These manifestations of respect and goodwill are in accordance with modern practices in socio-economic-environmental-security diplomacy as globalization steadily moves the 21st century forward to a “one-world community of nations” as envisioned in the 2030 united nations’ 17 sustainable goals approved by 195 nations – including the US, China, Russia, the EU and ASEAN.

Brief History of Taiwan

The island of Taiwan (formerly known as “Formosa”) was mainly inhabited by Taiwainese aborigines until Han Chinese began immigrating thereto. In 1662, the kingdom of Tungning, the Pro-Ming loyalist warlord Koxinga established the first Han Chinese polity on the island. Later, the Qing dynasty of china defeated the Tungning kingdom and annexed Taiwan.

By the time Taiwan was ceded to Japan in 1895, the majority of Taiwan’s inhabitants were Han Chinese either by ancestry or by assimilation. Under the leadership of national hero, Dr. Sun Yat-sen, the Republic of China (ROC) was established in China in 1912. After Japan’s surrender in 1945, the ROC assumed control of Taiwan. As a result of the Chinese civil war in the 1940s, the Communist Party of China took full control of the mainland, and founded the People’s Republic of China (PRC) in 1949. The ROC under Generalissimo Chiang Kai-shek relocated its government to Taiwan, and its jurisdiction became limited to Taiwan and its surrounding islands. In 1971, the PRC assumed ROC’s seat, thus establishing the “One-China” policy in the UN However, 21 UN member states currently maintain official diplomatic relations with the ROC. It also has unofficial ties with most other states via its representative offices like the Taiwan Economic and Cultural Office (TECO) in the Philippines.

The total area of the current jurisdiction of Taiwan/ROC is 36,200 sq km (13,980 sq mi), making it the world’s 137th largest country, smaller than Switzerland but larger than Belgium. It has a population of 23,403,000 (April 2017). The shape of Taiwan is similar to a sweet potato seen in a south-to-north direction, and therefore, Taiwanese (especially Min Nan speakers) often call themselves “Children of the Sweet Potato.”

The island of Taiwan lies in a complex tectonic area between the Yangtze plate to the west and north, the Okinawa plate on the northeast, and the Philippine mobile belt on the east and south.

Taiwan’s Role in the World Economy

Taiwan occupies an important position in the global economy. Foreign trade is important to Taiwan’s economy, and government efforts to enhance economic ties with other countries have paid dividends.

Taiwan joined the WTO in 2002 and has signed free trade agreements with diplomatic allies like Panama and El Salvador.

Among the country’s important industries are computers and peripherals, integrated circuits, optoelectronics, precision machinery,  and telecommunications. The information technology industry makes up around 1/3 of Taiwan’s Gross Domestic Product. It is a leading player in the world’s ICT sector, as well as a major supplier of industrial goods. According to the World Trade Organization, Taiwan was the 20th largest exporter and 18th largest importer of merchandise in 2014.

In 2013, Taiwan concluded economic cooperation pacts with New Zealand and Singapore, as well as resumed talks with the US under the Trade and Investment Framework Agreement. These developments are expected to assist the country’s participation in regional economic integration agreements such as the Regional Comprehensive Economic Partnership (RCEP), as well as help in deepening ties with regional/global partners.

According to the Taiwan National Development Council, Taiwan’s GDP growth rate for 2016 had expanded just 0.7%, mainly because of domestic political infighting. However, with Taiwan’s plans to expand investments for forward-looking infrastructure and accelerate public enterprise investments, its economy is expected to rise substantially in 2017.

The ‘New Southbound Policy’

When Dr. (Ms.) Tsai Ing-wen of the Democratic People’s Party (DPP) was sworn in as Taiwan’s new president on 20 may 2016, the DPP also won a substantial majority in the legislative Yuan that – for the first time in Taiwan’s history – is now controlled by the president’s party.

President Tsai has announced that her Administration will pursue a “New Southbound Policy” in the years ahead. In the past, the “Southbound Policy” directed Taiwanese investment only into Southeast Asian countries. This time, trade and investment will form just one component of Taiwan’s diverse and multifaceted economic strategy.

Other facets include stronger people-to-people, cultural, educational and research linkages. In a recent speech, President Tsai acknowledged that ASEAN and India are poised to become two of the world’s important economic bodies.

The Tsai Administration’s Five Core Industries are:

  • Internet of things.
  • Bio-technology.
  • Smart machinery.
  • Defense industries including shipbuilding.
  • New energy.

Philippines-Taiwan Economic Relations

Trade:

  • Philippine’s total trade to the world $137.20 billion (2016) vs. $129.90 billion (2015).
  • Taiwan is the Philippines’ 6th trading partner, 10th export market, and 6th import source.
  • Exports to Taiwan were $2.060 billion (2016) vs. $2.010 billion (2015).
  • Imports from Taiwan were $5.066 billion (2016) vs. $5.840 billion (2015).
  • Bilateral trade with Taiwan was $7.122 billion (2016) vs. $7.850 billion (2015).
  • Balance of trade was in favor of Taiwan by $3.01 billion in 2016.

Investments:

  • In 2015, total recorded Taiwanese investments in the Philippines amounted to $35.6 million.
  • In 2016, total recorded Taiwanese investments in the Philippines amounted to $147.7 million, which is a 314.90% increase or our 3rd fastest growing investment source.
  • Majority of investments went to transportation and storage, manufacturing, and real estate activities.
  • Taiwan is Philippine’s 4th source of foreign investments.

Tourism:

Visitor arrivals for the period of January to December 2016 reached 231,801 which is an increase of 28.71% from the previous year (180,091).

The substantial increase in tourist traffic for 2016 was brought about mainly by:

  1. More aggressive marketing initiatives to promote Philippine destinations through working with travel agents and airlines, thus creating new products for the Taiwan market.
  2. Continuous media exposure thru internet, TV, print and outdoor advertising. Although limited in financial capacity, our series of familiarization trips and joint promotions with travel and tour industry stakeholders enabled the Philippines to secure more media mileage.
  3. New charter flights to the Philippines that led to the increase in tourist traffic.
  4. MECO’s activation of on-line visa application which now enables Taiwan passport holders to acquire an entry permit to the Philippines anytime, anywhere.

Labor:

As of December, 2016, there were 136,400 overseas Filipino contract workers in the entire island as per official count of Taiwan’s Workforce Development Agency (WDA) of the Ministry of Labor (MOL). As earlier pointed out, this is more than 11% increase in OFW employment in Taiwan compared to previous years.

Distribution as to Work Category:

Manufacturing — 104,143 (76.35%).

Caregiver/Household Workers  — 30,483 (22.35%).

Fishing — 1,706 (01.25%).

Others — 68 (00.05%).

Conclusion: the outlook for overall Philippines-Taiwan relations and stronger partnerships in various sectors is especially favorable for year 2017 and beyond.

Recommendations – Abangan, Part II, Next Week.

Please send any comments to fvr@rpdev.org. Copies of articles are available at www.rpdev.org.

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