This article was originally published by Global Taiwan Institute in its weekly newsletter, The Global Taiwan Brief, Vol. 9, Issue 9. Used with permission. To get the Global Taiwan Brief in your inbox every week, subscribe at globaltaiwan.org/subscribe. Julio S. Amador III is the president of the Foundation for the National Interest, a Manila-based public policy think tank.
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Lai Ching-te (賴清德) of the Democratic Progressive Party (DPP, 民進黨), the very same party of outgoing President Tsai Ing-wen (蔡英文), emerged victorious from a three-way January electoral contest with Hou You-yi (侯友宜) of the Kuomintang (KMT, 國民黨) and Ko Wen-je (柯文哲) of the Taiwan People’s Party (TPP, 台灣民眾黨). Not long after President Ferdinand Marcos, Jr., extended his congratulations to Lai and the DPP, Beijing launched rhetorical provocations against the Philippine government. This prompted Manila to reiterate its commitment to the status quo in the Taiwan Strait.
The Philippines has a special economic relationship with Taiwan, but not on the same level as Taiwan’s relations with the United States. The Philippines, at the minimum, acknowledges the People’s Republic of China (PRC), rather than the Republic of China (ROC, Taiwan), as the sole political government of China, and has consistently affirmed the “One China Policy” and related communiques. The Philippines and Taiwan maintain unofficial economic and cultural ties, formally embodied in two important institutions: the Manila Economic and Cultural Office (MECO, based in Taipei) and the Taipei Economic and Cultural Office (Makati). The Philippines simply employs a limited engagement strategy with Taiwan, and the PRC is a major factor in this approach. Broadly speaking, the bilateral relationship is shaped by the Philippines’ diplomatic relations with mainland China. For much of the Rodrigo Duterte Administration, the Philippines largely maintained cordial ties with Beijing.
Manila was receptive to Taiwan’s New Southbound Policy (NSP, 新南向政策) under the Tsai Administration and saw it as an important strategic facilitator for trade, technology, agriculture, medicine, education, and tourism. However, the gains resulting from the Philippines-Taiwan economic and cultural relationships are not widely discussed, as they are considered secondary to the Philippines’ economic and cultural trade with mainland China and its special administrative regions (SARs) of Hong Kong and Macau.
Much of the Philippines’ security and political interactions with Chinese counterparts have consisted of extensive maritime disputes in the West Philippine Sea. Manila has been at the receiving end of the PRC’s aggressive actions and has experienced the aftermath of challenging the latter’s “red lines.” Previous Philippine administrations have viewed Taiwan as one such “red line,” which Manila has yet to cross. For this reason, Manila’s economic engagements with Taiwan have historically been limited, as the Philippines is also aware of Beijing’s sensitivities on the issue. When President Marcos, Jr., unexpectedly sent his congratulatory remarks to President-elect Lai, he was seen as challenging Beijing’s “red line.” In turn, this decision could hint that the Philippines now sees Taiwan with strategic value.
Taiwan’s Strategic Value to the Philippines
The Philippines sees the value of Taiwan in three areas: geopolitical stability, economic security, and socio-cultural value.
A Geopolitical Flashpoint of Interest
Taiwan is a geopolitical flashpoint with immense economic value. For the Philippines, Taiwan sits at the heart of the region, a geopolitical link between Northeast and Southeast Asia. The two countries are part of the “first island chain,” directly facing mainland China. Some 70 percent of global trade is conducted by sea, of which 60 percent passes through Asia. The South China Sea, which sits just past the Taiwan Strait, accommodates annual trade worth more than USD $3 trillion. Beyond the Strait, economic activity passing through Taiwan branches out to equally important waterways such as the Strait of Malacca. The Philippines will be interested in keeping these waterways open and navigable, particularly as economic activities are concerned.
A potential cross-Strait crisis is well within the Philippines’ radar. This is why former President Duterte made a pronouncement of neutrality, stating that Manila would avoid involvement should a conflict erupt between China and Taiwan. However, Manila cannot openly renege on its security commitments to the United States should the latter need the former’s assistance in coming to Taiwan’s aid. Manila’s involvement would probably be guaranteed should conflict spillover to its borders, especially because Taiwan and the Philippines are very close to one another. [1] The Marcos Administration’s efforts at strategic balancing has seen the renewal and advancement of Philippines-US security relations, with Manila viewing the United States as a strategic buffer against China’s provocative actions over Taiwan.
Additionally, whenever the DPP—or indeed any other political party aside from Kuomintang—takes hold of leadership, Taiwan’s global presence tends to diminish in the face of Chinese pressure. Taipei must not downplay China’s assaults on its international visibility. Instead, Taipei should double down on its soft power and public diplomacy efforts and cater to the needs of countries from the Global South, including the Philippines. By championing an alternative model for governance and resilience from coercion, Taiwan could sustain international support.
An Economic Importance
The economic sway of Beijing is a paramount consideration in Manila’s engagement with Taiwan. Recognizing this, the Tsai Administration sought to expand its economic connections with the Philippines through the NSP. The NSP sought to expand areas of cooperation, including trade and investment, agriculture and aquaculture, fisheries, small- and medium-sized enterprises (SMEs), information and communication technology (ICT), climate change, education, and culture. Perhaps more importantly, it focused on lessening Taiwan’s economic reliance on mainland China.
From the outset, the NSP targeted the Philippines as a key partner, a decision which was welcomed by Manila. Much of the effort needed to bolster the NSP hinged on public diplomacy and grassroots campaigns to make both economies appealing to foreign investors from both sides. The NSP built on existing milestones in Philippines-Taiwan relations, including the expansion of two-way trade and the increase of two-way arrivals of foreign nationals under the Duterte and Marcos Jr. Administrations.
The last three years of the Tsai Administration have seen not only the post-pandemic stabilization of trade relations but also its expansion above pre-pandemic levels. Two-way trade between Taipei and Manila peaked at more than USD $215 million in 2022. Trade relations have seen an upward trajectory for the last eight years sans the pandemic detour. The movement of people, on the other hand, has been facilitated by existing immigration policies between the two countries, embodying a level of trust on human capital. Taipei has a 14-day visa exemption policy to Filipino nationals entering Taiwan, whereas Manila employs a 30-day exemption—neither of which is enough for the conduct of business. Taiwan nationals comprised about 1.3 percent of the total foreigners in the Philippines in 2020 (1,021 of 78,396), and Taiwan ranks eighth in the Philippines’ list of top sources of foreign nationals. [2] Taiwan, on the other hand, hosts a healthy diaspora of Filipinos. The Philippines has consistently ranked third in terms of foreign nationals living in Taiwan in the last four years, with over 150,000 Filipinos living in Taiwan.
The special relationship between the Philippines and Taiwan cannot be underestimated. Broader gains in the construction, health, science, and financial sectors have been achieved in recent years following the implementation of the NSP, and more can be achieved ahead. However, there is much to be done along two important fronts: 1) making Philippines-Taiwan relations resilient from external pressure; and 2) improving Taiwanese public diplomacy on the ground.
For instance, following mounting pressure from China, both Taipei and Manila have worked to sustain NSP in the Philippines. While Filipino experts have identified the NSP as a productive model for economic cooperation, the initiative is not intended to “di-sinicize” the Philippines in any sense of the word or remove mainland China in the equation altogether. However, there is a growing movement to make Manila-Taipei cooperation resilient to Chinese pressure. Economic coercion, especially of the sort employed by the PRC, is a legitimate concern across the Global South.
One critical liability facing the Philippines is largely a human element: overseas Filipino workers (OFWs). OFWs are a major driver of Philippine economic growth, and Taiwan hosts a sizable Filipino diaspora. OFW remittances from Taiwan reached record levels in 2022, and the value that OFWs from Taiwan bring to the table cannot be denied. The high number of Filipinos residing in Taiwan makes them quite susceptible to foreign interference from Beijing, a major concern for the Philippine government. Despite assurances from MECO, Manila could nevertheless succumb to threats from China against its own population. The Philippines pursues a foreign policy that primarily is focused on protecting OFWs, and protecting these overseas workers would be the government’s chief and primary concern in any crisis.
A Socio-Cultural Imperative
Taiwan and the Philippines are alike in ways that China and the Philippines are unalike. Both societies place a premium on values unique to democracies—such as personal freedoms and human rights, a free market, and pluralistic governance. Much needs to be done to build upon these shared ideals.
One such instance is on the exchange of talents and laborers. Taiwan has accommodated a large number of OFWs already. Due to the strong Taiwanese demand for manual labor in the manufacturing and healthcare sectors, Filipino expertise and talents have flocked to Taiwan for economic opportunities. OFWs now comprise a majority of the workforce in several major Taiwanese electronics firms. The two sides should work to capitalize on this unique relationship and make it resilient to exogenous factors, such as those emanating from the PRC.
One other instance is on Chinese disinformation and misinformation. The Philippines has much to learn from the Taiwanese blueprint for combating such threats and fortifying online spaces from misinformation and disinformation originating in mainland China. Taiwan has long been ground-zero for propaganda from China. The Philippines is only recently coming to terms with the reality of Chinese propaganda, which has flourished since the expansion of Philippines-China ties during the Duterte Administration.
Taiwan as an Indicator of Philippine Foreign Policy Thrust
Although a formal policy outline has yet to be issued by the Philippine Government, there is now an emerging consensus on the value of Taiwan to the Philippine security strategy. Taiwan is now an important indicator of the Philippines’ foreign policy approach to China and the greater East Asia region. The specific synergies of the Taiwan question with the Philippines’ Japan and South Korea policies remains to be determined. However, the Philippine government is now paying more attention to developments in the Taiwan Strait. With the Marcos Jr. Administration, a China policy will likely always be two-pronged: with one prong oriented to Beijing, and another toward Taipei.
Signaling from Taipei will likewise be crucial if it wants the Philippines to play a bigger role in improving the salience and relevance of the informal ties. The development of an ad hoc Taiwan policy is well within the Philippines’ national interests. The unique overlaps of Taiwan’s efforts to safeguard its sovereignty with the Philippines’ interest in regional stability merits increased attention from the entire region. Because the Philippines stands to gain from a bolstered relationship with Taiwan, testing China’s “red line” could buttress Manila’s position as a middle power in the region. Through Taiwan, the Philippines can weather the highs and lows of China’s diplomatic offensive.
However, efforts to improve Taiwan-Philippines relations must be grounded in pragmatism and reality. Improving economic cooperation will have a lasting impact on Manila’s China policy, and the deepening engagement with Taipei will likewise be tempered by how Beijing pushes back. The role of US alliances will serve an important role if Taipei wishes the Philippines to take on more burden than it already has. For instance, the establishment of a Taiwan Semiconductor Manufacturing Company (TSMC, 台灣積體電路製造股份有限公司) branch in the Philippines could yield benefits for both countries, and TSMC presence in the Philippines could help to insulate Manila from Chinese economic pressure. However, such steps could incur Beijing’s wrath, and would likely require US support in order to shield against Chinese responses.
More importantly, the orientation and disposition of Taiwan toward the Philippines will be of critical importance to policymakers from Manila. At the heart of the Taiwan question is Taipei’s political survival—and Manila knows this. However, the Philippines approach to Taiwan will always be shaped by its approach to the PRC, as well as a desire to avoid further upsetting the delicate balance in the Taiwan Strait.
Shifts in Taiwanese interests represent clear lines for Taiwan’s future, China’s legitimacy, the United States’ regional strategy, and the Philippines’ strategic horizons. With the DPP remaining in power, Taiwan is likely to continue its efforts to enhance its ties with the Philippines. The continuity in DPP leadership represents an opportunity to expand economic and cultural relations, and to bolster political and diplomatic engagements on issues of mutual importance to Taipei and Manila. Both the Philippines and Taiwan will need to reflect on the extent to which the two can individually push the envelope with China—or rather, maintain a workable status quo that does not provoke Beijing. President-elect Lai Ching-te and President Ferdinand Marcos, Jr., seem determined to approach bilateral relations between their countries with renewed interest. Making that rekindled interest resilient from Chinese pressure will be key.
The main point: The Philippines and Taiwan have greatly expanded their informal relations over the past several years, capitalizing on shared values and growing economic complementarity. However, mounting Chinese pressure on both nations will complicate these ties, necessitating increased coordination between Manila and Taipei.
[1] The approximate distance from the northernmost tip of the Batanes group of islands to the southernmost tip of Taiwan is more than 140 km (75 nautical miles).
[2] In the Philippines’ most recent statistics (most recent is 2020), Mainland China ranks the 1st for the number of foreigners in the Philippines.
(Photo by Road Ahead on Unsplash)
