Taiwan makers looking at relocating production, eyes investments in PHL, says Taiwanese professor

Prof. Jack Wen-Chieh Wu of the Department of Public Finance at the National Chengchi University speaks at the Asian Economic Outlook 2024 Photo by Angela Loraine Castro/UST Asian Studies Gazette

By Shaira Dennisse Sindayen

Taiwan hopes to see more manufacturing companies coming to the Philippines as Taiwan hinges on its New Southbound Policy, Prof. Jack Wen-Chieh Wu of the Department of Public Finance at the National Chengchi University said on Thursday, Jan. 17.

Wu said that the geopolitical tension between Taiwan and China and the US-China Trade War are raising safety issues affecting the former’s manufacturing bases, which produce cutting-edge semiconductors for many tech companies globally.

“If there is war in Taiwan, then the whole supply chain will stop,” Wu added as companies from the United States, Japan, and the European Union are asking Taiwanese makers to move factories outside the country.

Meanwhile, Taiwan, the US, the EU, and Japan are set on creating a blue supply chain in contrast to the red supply chain dominated by China.

“Normally, the American brand would ask Japanese companies to design the technologies and ask the Taiwanese companies to produce, now they are making the products in Southeast Asia or India,” he added.

Wu asserted that this new supply chain model presents an opportunity for SEA countries since tech giants such as Samsung and other Japanese companies are investing in the region. Wu added that some Taiwanese tech companies are now moving to Vietnam and even the Philippines.

The Philippine Economic Outlook

The Philippines is poised to become the fastest-growing economy in Asia by 2024, the chairperson of the Department of Economics at the Ateneo de Manila University, Prof. Alvin Ang, Ph.D., said in a separate lecture. 

However, Ang asserted that despite the growth numbers, the country continues to go below its peers in the Association of Southeast Asian Nations (ASEAN). 

“Despite our very good people with technical knowledge and an advanced use of English, we are still overtaken by other countries,” he added.

Ang discussed that despite the available number of jobs, the problem lies in the quality of work that is needed to provide Filipinos with sustainable income. “They are not quality work and will not be able to sustain their families,” he said.

Meanwhile, he acknowledges Taiwan’s contribution to the Philippines’ manufacturing and export initiatives but cites the high level of skills required, which causes limited employment. “There are plants here that export, but they only employ about 10%,” he said.

Despite this, Ang added that the high remittances and the robust Business Process Outsourcing (BPOs) keep the economy afloat as the country's economy continues to grow at a steady state.

Meanwhile, he emphasized that the Philippines is in a good position demographically. 

Ang discussed that this demographic dividend can serve as a “turbo boost” for economic growth, but 30% of the labor force is stunted, which lowers the probability of acquiring quality jobs. 

He added that poverty and stunting hamper this opportunity, causing large inequality.

“We cannot be complacent with our growth...our goal is not just to achieve growth but to distribute it to the rest of the population,” Ang said.

The seminar titled “Asian Economic Outlook 2024,” held on Thursday, Jan. 17, at the Thomas Aquinas Research Center and Graduate School (TARC) Auditorium, is organized by the UST Department of Interdisciplinary Studies - Asian Studies Program, UST Asian Studies Society, UST-Artlets Economics Society, and the UST Department of Economics.