Bernardo M. Villegas
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The Philippines’ Closest Northern Neighbor

           With just a little bit of hyperbole, it is said that once a cock crows at the southernmost portion of Taiwan, it can be heard all the way from the islands of Batanes.  In fact, there are indeed very close historical and cultural ties of the indigenous people of Northern Luzon with those in the southernmost part of Taiwan.   These two economies are the most logical partners for full integration of their respective industries as the ASEAN Economic Community (AEC) implements various AEC + 1 strategies.  There is so much complementarily between the Philippines and Taiwan.

          The Philippines has still vast agricultural lands that can be made more productive with the technology and experiences of Taiwan over the last fifty years.  The young, growing and English speaking population of the Philippines can help ease the demographic crisis of our northern neighbor and, as regards the English proficiency of Filipinos, can help Taiwanese businesses in their globalization strategies as well as contribute to the increased English proficiency of their youth in the same way that the Philippines has already served as a training ground in oral English for the South Koreans.  Taiwanese factories migrating away from other Northeast Asian territories where wages have become uncompetitive will find Philippine labor both competitive and unaffected by the strikes that have become rampant in other Southeast Asian countries.  Taiwanese entrepreneurs will find it very easy to communicate with their counterpart among the Filipino Chinese because of the common Fookienese language they speak.

          What can the Philippines expect of Taiwan?  The first is the very important lesson of how to avoid the middle income trap that has afflicted many emerging markets over the last twenty years.  Taiwan—like South Korea—escaped this middle income trap by building excellent infrastructures; establishing world class educational institutions, especially at the tertiary level; and investing heavily in research and development in both agriculture and industry.  We can attract Taiwanese construction companies to help us build infrastructures like airports, railroads and tollways. The Taiwanese intend to create a collaborative platform for exporting infrastructure construction services and turnkey projects.  They will form export teams on energy, petrochemical ad environmental infrastructures and build strategic alliances with our service providers.

     Like the partnership between KnownYou seed company in Taiwan and Harbest in the Philippines, agribusiness technology from Taiwan can be transferred especially to our sugar, fruit, vegetable, livestock and fisheries sectors not only at the farm level but also in the cold storage and other post-harvest stages and especially in food manufacturing. Our agrarian reform efforts, which still seem directionless, can learn many lessons from one of the most successful land reform programs in emerging markets over the last fifty years.  The cooperative movement in the Philippines can produce more successful models like Soro-soro in Batangas and CARD in Laguna by transferring the experiences of some of the most successful initiatives in cooperative development from Taiwan.

          Thanks to the leadership of newly elected President Tsai Ing-wen, the Taiwanese Government has set forth the “New Southbound Policy Promotion Plan”, which calls for the development of comprehensive relations with ASEAN, South Asia, Australia and New Zealand while promoting regional exchanges and collaborations.  The aim of the plan is to build a new model of economic development for Taiwan, reposition Taiwan as an important player in Asia’s growth, and create new value for the future.   The Philippine Government and the business sector should take note of the following tasks outlined in the “New Southbound Policy Promotion Plan” announced by the Taiwanese Government:

          --Promote economic collaboration:  Forge new partnerships by integrating with the AEC’s supply chains, connecting with their domestic demand markets, and cooperating on infrastructure projects.  The Taiwanese can especially help us in the next six years to make a quantum leap in irrigation systems, post-harvest facilities and farm-to-market roads—the key to the outstanding success of Taiwan in the last century to improve agricultural productivity.

          --Supply chains:  Taiwan will support the industrial capacities and demands of partner countries through the five major innovative industries it is currently developing.  For instance, Taiwan can export or help set up internet-of-things systems for such applications as electronic toll collection, smart health care and intelligent school campuses.  The government will also set up a “Taiwan Desk” in our country to gather local resources and help overseas Taiwanese enterprises form business clusters.  Potential regions that can be helped in this regard are Northern Luzon, Western Visayas, and the whole of Mindanao where agribusiness ventures have the brightest prospects.

          --Talent exchange:  With a focus on people, deepen bilateral exchange and cultivation of young scholars, students and industry professionals.  Given the abundance of university graduates from the Philippines, Filipino professionals can complement the human resources of Taiwan that is suffering from manpower shortages. More Filipino students can be granted scholarships to Taiwanese universities.  The Taiwanese government can encourage some of their universities to set up campuses or courses in the Philippines.  It will also promote a two-way flow of professionals, streamline procedures for Filipino workers going to Taiwan, and match them to Taiwanese companies.

          --Capitalize on Taiwan’s soft powers to promote bilateral and multilateral cooperation in culture, tourism, medical care, technology, agriculture and small and medium-sized enterprises.  The Philippines can be helped in bilateral pharmaceutical certifications and new drug and medical equipment development as well as in the training of medical care and public health workers.  Filipino professionals can benefit from international connections at Taiwan’s science parks and research institutes and exchanges in smart disaster prevention technologies. 

          The Philippines should be among the first to exploit all the opportunities that will arise from the New Southbound Policy recently announced by the Taiwanese government.  It would be advisable that the private sector should take the lead in conducting an active dialogue with the Taiwanese government and business community.  I encourage the regional business clubs, e.g. the Makati Business Club, the Cebu Business Club and the Iloilo Business Club, to organize private investment road shows to key Taiwanese cities in the coming months.  I, together with my colleagues at the Center for Research and Communication of the University of Asia and the Pacific, will be more than willing to help in the organization of these road shows. Much can be gained in terms of increased Foreign Direct Investments and exports from these road shows, as I have experienced over the last forty years traveling all over the world in what are called non-deal investment road shows organized by private Philippine corporations and business clubs.  For comments, my email address is bernardo.villegas@uap.asia.