Taiwan and the Philippines are two south-eastern Asian nations that share close ties – and not just because there’s only 1,200km of sea to separate them. In recent times, efforts have been made to consolidate and deepen the ongoing relationship between Taipei and Manila. In 2017, the signing of a bilateral trade and investment agreement marked a new era in relations.

A cornerstone of its current foreign policy, Taiwan’s New Southbound Policy is designed to pull the island nation closer to its neighbours in the region. The Philippines, as one of its closest, is seen as one of the leading partners. In doing so, Taiwan hopes to reduce its economic reliance on mainland China – the source of a protracted and long-term dispute over sovereignty.

The relationship between Taiwan and the Philippines 

It’s no surprise that Taiwan views Philippines as one of the most important partners in its New Southbound Policy. The geographic closeness is an important factor. But, historically too, there is much more that unites the two nations than first meets the eye. 

There are numerous common shared values – including the rule of law, democratic governance and personal freedoms. More than 150,000 Filipino workers have been attracted to Taiwan due to its employment opportunities too. Now, Taiwan wants to build on this existing relationship in a wide range of areas – including trade and investment across the Luzon Strait.

It is a policy that is delivering results for both partners. For Taiwanese businesses, countries in the south east Asia region are now more popular investment destinations than mainland China. And, for those countries, it has driven significant growth in inward investment from Taiwan. Of course, this investment is reciprocal too – with inbound investment also increasing sharply.

The current economic climate could yet see the forging of deeper ties between Taiwan and the Philippines too. If wider trade links with the rest of the world take a hit from various lockdown restrictions, it will underline the importance of regional ties. With the Taiwanese administration looking away from China, those ties can be found first in the Philippines and then beyond.

Bi-lateral agreement creates investment opportunities 341 

With the bilateral agreements in place between the two nations, there are fresh opportunities to create new business links. For investors in the Philippines, the current legal and regulatory landscape means that Taiwan could provide one entry point into the global forex market. Yet, Taiwan’s main area of focus at the moment appears to be its emergence as a tech hub.

As such, tech investment opportunities are likely to flourish between the two nations over the coming years. Amid domestic support from its government, Taiwan stands to grow even more as a tech hub – assisted by the flow of labour from neighbouring countries like the Philippines. In addition, the Philippines can further help this tech renaissance with the supply of metallics.

For the Philippines, its reputation as one of the brightest pharmaceutical markets in the region makes it attractive to Taiwanese investors. And there are also the shared industries of tourism, fishing and agriculture to consider. With the ties that bind Taiwan and the Philippines together, opportunities that exist for future trade and investment are as exciting as they are appealing.