Bernardo M. Villegas
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Rebalancing Strategy
published: Mar 31, 2017



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Taiwan Model (Part 2)

           I verified from some of those who attended the road show that a major worry of Taiwanese society is food security.  Although they have very productive technology in agriculture, they are rapidly running out of land through urbanization and industrialization of their limited farms.  To make matters worse, in their high-growth years of the last century, they were forced to pump much water from their soil so that their island is beginning to sink.  They have to limit farming and they have no alternative but to import food from other countries, especially from their nearest neighbor in Southeast Asia.   They look with interest at the whole of Northern Luzon, especially Cagayan valley, where there are vast tracts of lands that are not very productively cultivated.  They would be more than willing to help us increase significantly our productivity in raising food crops in particular so that, after feeding ourselves, we can still produce more than enough to export to them.  It would be wise for Philippine agribusiness companies to travel more frequently to Taiwan to look for potential joint venture partners in food production that should cover the whole value chain from farming to post harvest to processing and manufacturing and all the way to retailing.  After all, one of the biggest investments of a Taiwanese company in the Philippines is the chain of Seven Eleven Stores.

          In the area of education, we told the Taiwanese that they should follow the example of the South Koreans who have discovered the Philippines as the most cost-effective country in which to immerse their youth (and even adults) in spoken English.  Now that the Taiwanese people will have to start learning the international business language, English, if they want to be an active partner of the AEC, they have to increase the number of their youth and professionals who can speak English effectively.  When over the last twenty or so years, they were comfortable enough to concentrate their investments in China, there was no language barrier since most of their educated people speak Mandarin fluently.  But this “Look South” policy would necessitate a linguistic transformation.  Many more of their present and future professionals will have to speak English.  It would be advisable for Philippine universities to attract more Taiwanese youth as exchange students.  Taiwanese companies thinking of tapping the ASEAN markets are well advised to send their young employees to work for some time in Philippine companies to perfect their English and to be exposed to the ASEAN culture.

          While in Taipei last January 13 to 20, 2016, I met Jerome F. Keating, Ph.D., the author of a very interesting book entitled “The Mapping of Taiwan.”    Dr. Keating confirms the well known fact that the original tribes who occupied the Philippines migrated from Taiwan and South China:  “…Recent studies suggest both by DNA and by language mapping that the vast empire of the Austronesian (to which the Philippines belongs) and Polynesian peoples originated in and began spreading out from Taiwan some 5,000 years ago…Taiwanese tribes studied were sea-faring people and explorers of the nth degree.  They crossed vast areas of the ocean, yet they did this without the use of modern maps or compasses.  They guided their seaworthy craft by sun, moon, stars, knowledge of wind and current, and even the knowledge of migratory birds.  From Taiwan, they first went to the Philippines and from there in roughly 1000-year burst to Fiji, Samoa, Tonga and throughout Polynesia.  Again and again, in one spurt after another they spread to New Zealand, Hawaii and as far as Easter Island in the east and Madagascar in the west.”

          This historical fact should make the Taiwanese people proud of the fact that they were the first to populate Southeast Asian countries, much before the European colonizers.   No wonder, Tagalog and other Philippine languages as well as Bahasa can be traced to languages spoken by the tribes in Taiwan.  This makes the Look South policy of the newly elected President Tsai Ing-wen a return to the roots of the Taiwanese people and a balancing factor to the constant insistence of the leaders of China that Taiwan is exclusively Chinese territory.  Without suggesting a drastic decoupling from China, especially economically, the new direction being taken by the first Lady President of Taiwan makes a lot of sense.  Since the Philippines is also first in the line in this Look South Policy, Philippine business people should waste no time in engaging  potential Taiwanese partners in such sectors as agribusiness, manufacturing, banking, transport and communication, infrastructure and real estate, tourism and logistics.  The Philippine CEO of CTBC, Mr. Steve Tsai, would be very happy to provide information to interested parties in the Philippines.  Thanks to him, we were able to meet some 80 Taiwanese entrepreneurs who have already shown interest in looking for trading and/or investment partners in the Philippines.  I also know for a fact that Taiwanese capital is available for investment in the Philippine insurance industry that has a lot of room for growth since Filipinos are terribly under-insured.  They are following the lead of Hong Kong investors who have already started to invest in our insurance industry. Expect some of our small insurance companies, as well as our medium-sized banks to be targets for acquisition of Taiwanese investors. 

          Finally, a most important reason why the Taiwanese should be engaging more Filipinos in business, both in and outside the Philippines, is the alarmingly low fertility rate in Taiwan at 1.1 babies per fertile woman.  Every year their population is declining and there is not much room for expanding the immigrant population.  Thankfully, because of common cultural traits, Filipino workers are among the most welcome in Taiwan.  As Taiwanese investors more aggressively expand their presence in the ten ASEAN countries, especially Indonesia, Vietnam, and Myanmar, they can depend significantly on Filipino managers to be among their expats in these countries.  Filipino managers are very welcome all over the ASEAN region.  They can make up for the lack of manpower from which Taiwan will increasingly suffer as their irreversible depopulation continues.  The corporate motto of CTBC is “We are family.”  We can apply the same motto to the relationships between the Filipinos and the Taiwanese.  Indeed, we are family, not only from the economic and cultural point of view.  We are genetically the same family.    For comments, my email address is bernardo.villegas@uap.asia.