Taipei Times (TT): I would like to start by asking you to explain in your own words what the role of your office is.
Antonio Basilio: We are just like any other embassy. We are the de facto embassy of the Philippines here in Taiwan. We perform consular services for Taiwanese visiting the Philippines, and for Filipinos who are living and working here.
We issue on average 100,000 visas or so [per year], and we have about 100,000 workers here. We also assist our nationals when they get into difficulties — fortunately, that doesn’t happen very often.
PHOTO: CHU PEI-HSIUNG, TAIPEI TIMES
Also, we work very closely with people in trade and people in labor to promote our economic relations, which we divide into four [areas]: one would be trade — our exports; two would be Taiwanese investments in the Philippines; three would be our labor and services; four would be tourism. More recently, I would add our cooperation in agriculture and fisheries.
We have three offices. Taipei, of course, would be the main office, and we have extension offices in Taichung and in Kaohsiung to service our Filipinos living in those areas.
TT: In your view, what is unique about the relationship between Taiwan and the Philippines, as far as trade and economic ties go — ie what special qualities does it have that other relationships don’t have?
Basilio: I guess there is something to be said about our geographic proximity ... in terms of taking advantage of the geographic proximity, we are now negotiating the establishment of an economic corridor that would link the export zones here in Taiwan with Subic and Clark export zones in the Philippines.
The idea is to create a virtual export zone, a seamless link between locators [businesses located] in Kaohsiung, or even Hsinchu and locators in the Philippines.
They could be the same company, and they could move workers from one area to another, depending on demand and the requirements of the market. They can move the goods freely between the two zones, and more importantly, if the Taiwanese locator exports to other ASEAN countries — as long as they meet the “rules of origin” criteria — they could take advantage of the duty-free access to other ASEAN markets.
I think that’s the biggest advantage. We are also considered one of the best outsourcing destinations, because we have people who can speak English, and who are knowledgeable not just in customer service — like for call centers — but also in design, photo typing, accounting, medical transcription and things like that.
There is a growing interest from Taiwanese companies to outsource some of these services to the Philippines, particularly as they begin to market their own brands and their own designs, rather than producing products for others, where they don’t need much marketing support.
TT: How do you think that increased cross-strait ties, or the relaxation of the cross-strait situation, between Taiwan and China is going to affect the Philippines, in terms of trade? Is it something you’re going to benefit from, or is it something you are concerned about?
Basilio: I think there are both positive aspects to it and also some challenges. But in general we can say that stability across the [Taiwan] Strait is good for the region; it’s good for the Taiwanese economy and it’s good for the Philippine economy.
If Taiwan’s economy strengthens as a result of openness in doing business with the mainland, then that benefits the Philippines. For example, the opening of Taiwan to tourists from the mainland could maybe generate more opportunities in the service sector. It would mean maybe increasing demand for people in the catering industry and the hospitality industry, and also the demand for food and consumer items like clothing and souvenirs.
The challenge is of course — in tourism for example — the focus might be more on China now than it would be on other destinations, like the Philippines. But we think that is going to be short term.
In terms of diversion of investment, that’s already happening.
I think it’s more a factor of what’s happening in China now — rising labor costs, lessening of incentives — for example, they just raised the income tax. So there are things happening that are making the Philippines a more attractive destination than before.
TT: You talked about the tourism industry a little bit there. How important a role does Taiwan play in the Philippines’ tourism industry?
Basilio: Taiwan is now the fifth largest source of tourists [to the Philippines]. There used to be as many as 250,000, which would have made them the third largest. But on the other hand, if we’re looking at traffic to other ASEAN destinations like Thailand and Malaysia, they get considerably more than we do.
We think one of the keys is getting more flights. So we have opened new direct flights. Just recently, Mandarin Airlines (華信航空)started service to Boracay, one of our more famous islands. There are direct flights to Cebu, and now we are also working on flights to Clark, which is the hub for budget carriers going on to various parts of Southeast Asia.
So Taiwan is very important to us in terms of tourism.
TT: What role does MECO play in developing tourism?
Basilio: Well, we have a full-time tourism representative from our Department of Tourism, and he’s been hard at work trying to promote tourism.
We’re looking at two ways. One is direct to the consumers. We’re doing that through sharing advertising costs, and also through organizing press missions, familiarization tours for travel agencies. Then of course we have some packages that we work on with travel agencies, for incentive travel, for example, for company outings or meetings, and packages to introduce new destinations.
More recently we have a group visiting Cebu to look at the Philippines as a destination for ESL, or English as a second language, particularly for summer programs.
TT: A group of ...?
Basilio: Of travel writers from Taiwan. So we’re organizing this on a thematic basis — sometimes it will be dive groups; sometimes it will be wellness and spa groups — so that we can get ourselves known to the public, that we have good destinations for those things.
TT: If you had to point to a single issue that’s an adverse issue, or a major challenge between Taiwan and the Philippines in terms of trade, what would that issue be?
Basilio: I think the irony is that despite the fact that we’re Taiwan’s closest neighbor, we’re largely unknown to many businessmen. I think they first look at China before looking at others in the neighborhood.
So I think we need to do a better job of getting Taiwanese businesses and consumers more familiar with what we can offer in the Philippines, in terms of products and services that we can provide, and also in terms of our attractiveness as a destination for investments.
TT: Is there anything you would like to highlight in terms of investment and trade?
Basilio: We’ve just barely scratched the surface of the opportunities for Taiwanese businesses in the Philippines.
One area that we are trying to develop now is in agriculture and fisheries. We have vast tracts of land, and we have people who can work the land. Our own domestic market is substantial. Of course, the attraction is also serving the Taiwanese market and markets in the region.
So we’re looking at fish culture, we’re looking at fruits and vegetables — Taiwan is helping us now develop suitable varieties of hybrid corn to service our own domestic market, but also at some point in time to service the Taiwanese market, because now transport costs have become an important factor. In most cases, they account for a significant part of the added costs of the product itself.
So we think that is one area that is quite promising, especially as fewer people are staying to work the land here in Taiwan.
TT: Do you have a specific example of an investment project or cooperation between a Taiwanese and a Philippine company that stands out in your mind as an example of the opportunities that exist for both countries?
Basilio: I think the most significant investment, in dollar terms, in the last couple of years is Formosa Heavy Industries’ (台朔重工) participation in the power generation sector. They’re working with a Philippine company that specializes in that area, for the central part of the Philippines.
TT: So they’re actually building power plants?
Basilio: Yes, they’re building power plants, and the distribution and operation will be the responsibility of the Philippine partner. Formosa will construct and maintain the power plant.
TT: So how much is that investment worth?
Basilio: The initial investment is about US$700 million.
TT: When did that begin?
Basilio: The agreement was signed last year, and the groundbreaking was this year. We’re looking at another one in Subic, Taiwan Cogen [Taiwan Cogeneration Corp, 台汽電], also working with a Philippine partner, which is a subsidiary of Taipower. Their major customer base there would be the locators in Subic and Hanjin, the shipbuilding yard in Subic.
So we’re inviting more and more Taiwanese companies to participate in the infrastructure, because we want to expose Taiwan to the Philippines and build consciousness. So we’re looking for some flagship project that can be linked to Taiwan.
TT: Are there any upcoming infrastructure projects that you might want to direct Taiwanese companies’ attention towards?
Basilio: There are three areas to look at: shipping ports, operation of airports and also telecoms.
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