Taiwan is looking at the Philippines as an alternative investment site to China and a gateway to the Association of Southeast Asian Nations (ASEAN) Free Trade Area, and is encouraging increased cooperation in the information technology industries.

Philippines, Taiwan to boost IT trade

Taiwan is looking at the Philippines as an alternative investment site to China and a gateway to the Association of Southeast Asian Nations (ASEAN) Free Trade Area, and is encouraging increased cooperation in the information technology industries.

These were the key messages delivered by Taiwan President Chen Shui-bian and other Taiwanese dignitaries during the first Taiwan-Philippines High-Tech Forum held last Sept. 27 at the Taipei International Convention Center. The Forum was one of the highlights of this year’s Computex Taipei IT exposition.

A cooperation agreement was signed by three business organizations from the Philippines and two from Taiwan to foster cooperation in the information industries during the forum.

The Forum was attended by a group of some 50 Filipino businessmen organized by the Philippine-Chinese Business Council (PCBC) of the Philippine Chamber of Commerce and Industry (PCCI). Alberto Fenix, president emeritus of the PCCI, and Jimmy Po, chair of the PCBC, led the Philippine delegation. About 200 Taiwanese entrepreneurs and government officials also attended the event.

The Philippines has become the springboard of Taiwan’s “Going South” policy, according to Chen. The Philippines and Southeast Asia is south of Taiwan, while China is west of the island-state.

The Taiwanese president encouraged the expansion of bilateral trade, and increased cooperation between the high-tech and information industries in Taiwan and the Philippines, saying that an alliance would benefit both in the global market.

He added that, in the light of the proposal to form the ASEAN Free Trade Area (AFTA), the two countries should draw up a global strategy to combine Taiwan’s manufacturing skills with the Philippines’ marketing and distribution capabilities. He also noted that Taiwan is the fifth biggest foreign investor in the Philippines and is a major trading partner of the country.

Chen said Taiwan’s information industry would be pleased to share its more than 20 years of experience in industry development with the Philippines. “Taiwan was ranked as the fourth largest producer of information industry hardware last year,” Chen said.

Taiwan has significant shares in the world market for notebook computers, liquid crystal displays (LCDs), mother boards, monitors, PC cameras, LAN switches, wireless LAN, cable modems, personal digital assistants (PDAs) and recordable compact and digital video disks.

A cooperation agreement was signed by the PCBC, its Taiwan counterpart, the Chinese-Philippines Business Council (CPBC), Taiwan’s Institute for Information Industry (III), the Semiconductor and Electronics Industries of the Philippines Inc. (SEIPI), and the Computer Manufacturers, Distributors and Dealers Association of the Philippines (COMDDAP).

The agreement provided for undertaking partnerships in the following areas: — Collaboration in IT education and training; — Pursuit of opportunities in software development; — Exchange of information, capabilities and opportunities; — Promotion of trade and investment in the electronics industry; and — Facilitation of the development of other IT-related areas.

A task force comprising mainly of the heads of the signing organizations will be organized to implement and monitor progress of the agreement.

Minister Lin Yi-Fu of Taiwan’s Ministry of Economic Affairs (MOEA), in his remarks at the opening of the Forum, said the signing of the MOU marked a new chapter of cooperation between the Philippines and Taiwan. He expressed hopes that, with the Forum, there will be closer economic relations that will promote trade policy alliances and cooperative supply chains between the two countries.

He also said 80 million Filipinos provide a large market that is proximate to Taiwan, as well as a strategic entry point to the bigger Southeast Asian market.

He reminded the participants that a large Taiwanese delegation will be attending the 29th Philippine Business Conference (PBC) on Nov. 25-29. The PBC will be followed by the annual joint PCBC-CPBC Conference.

Taiwanese newspaper reports quoted Senator Chang Chun-Hong, senior member of the Democratic People’s Party (DPP), as saying that the presence of the president, minister of economic affairs and other dignitaries in the Forum indicated the increasing importance of the Philippines to Taiwan.

While the relationship with the Philippines may not be as important as that with the United States and Japan, he said strengthened relationships with the Philippines can lessen the risk of over-concentration of Taiwanese investments in China. Moving investments to the Philippines is, therefore, in harmony with Taiwanese interests, Chang was quoted as saying.

Frank Huang, chair of the Taipei Computer Association, cited Philippine advantages in providing a regional shipping hub and an English-speaking environment. He suggested that Taiwanese testing and packaging IT products and call center support operations can best be handled through the Philippines.

David Chang, secretary general of the Information Service Industry Association of the R.O.C., also suggested that Filipinos can handle the English translation of user manuals and other technical support documents.

Chao Yuen-chuan, president of the China External Trade Development Council, noted that IT trade between the two countries currently favors Taiwan. He, thus, expressed hope that Filipinos can offer more electronic products to Taiwan.

Huang Chih-peng, director general of the MOEA’s Bureau of Foreign Trade, said that in earlier years, the Philippines gave scholarships to Taiwan, and that now is the time for the Taiwanese to reciprocate.

PCBC’s Po encouraged industry players from both Taiwan and the Philippines to come up with concrete projects to strengthen cooperation in high-tech industries. Philippine English proficiency can complement advanced Taiwanese technologies for both so the two countries jointly confront the challenges of globalization, he said.

Francis Ferrer, SEIPI chair who was also part of the Philippine delegation, highlighted the capabilities of Philippine electronic companies to sub-contract part of the supply chain, facilitated by location in export zones, and suggested that longer supply chains could be handled if Taiwanese investors could provide such support industries as tool and die, components, and plastics.

For his part, PCCI’s Fenix emphasized that the challenge facing the participants to the Forum is to ensure that it goes beyond mere talk, and to take action and pursue projects into reality.

As a result of the Forum, two Taiwanese companies are already engaged in serious talks about investing in Subic, while another is negotiating outsourcing arrangements to the Philippines. One of the Filipino delegates is also now discussing the English translation of Taiwanese manuals. Taipei Mayor Ma Ying-jeou also invited the delegation members to visit the Neihu Industrial Technology Park and said he will encourage locators to source skilled labour from the Philippines.

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