Investment deal with Taiwan to focus on agricultural ventures

THE Philippines’ representative mission in Taiwan expects to launch a bilateral investment agreement with its host government by December, with the aim of encouraging more Taiwan agriculture and aquaculture businesses to set up shop in the Philippines.

“We’re about finished [drafting] a bilateral investment agreement with Taiwan… it will encompass all industries for the Philippines, but for the short term [ Taiwan] is interested in agriculture and aquaculture,” Angelito Tan Banayo, chairman and resident representative of the Manila Economic and Cultural Office ( MECO), told reporters in Taichung, Taiwan on July 17.

“We have to make sure that [ language] does not contravene the One-China Policy,” he added.

Diplomatic relations with the People’s Republic of China, which considers Taiwan to be a renegade province, depend on adhering to Beijing’s One-China Policy. The policy prevents Beijing’s partners from recognizing Taiwan, which off icially calls itself the Republic of China.

Data from the Department of Trade and Industry (DTI) show Taiwan to be the 9th largest export market and 7th largest source of imports for the Philippines.

“There is a huge business opportunity in the production and/ or supply of agricultural equipment, machinery and technologies as well as food processing equipment to the Philippines. This will greatly address our quest to empower and enhance productivity in the regions,” DTI Secretary Ramon M. Lopez told BusinessWorld in an e-mail interview earlier this month.

In June, the DTI and MECO brought 16 Filipino food exporters to the Taipei International Food Show. They are projected to generate $23 million in sales from their participation.

Mr. Banayo said the chocolate producer Malagos from the Davao region was a “howling success,” adding that MECO is looking to capitalize on the potential of such high-value exports to Taiwan.

“There will be a joint economic conference in Manila on the first week of December and that is where we’ll be signing major investment agreements,” he said.

He plans to partner agricultural and aquacultural businesses from Taiwan with State Universities and Colleges (SUCs) focusing on these industries.

“Since the Constitution prohibits them from buying land, we’d like to partner them with SUCs — like the Central Mindanao State University in Bukidnon — let them bring their technology there and let them use the land for a start until… we get around to amending the Constitution,” Mr. Banayo said.

The agreement will serve as a “legal framework for Taiwan businessmen to know their rights and privileges if they decide to invest in the Philippines and how these are protected.”

He noted that some Taiwan businessmen were deterred from entering the country because of its foreign direct investment (FDI) rules.

The Philippines is considered to have one of the world’s most restrictive regimes for FDI, according to the Organization for Economic Cooperation and Development’s investment policy review of the country released earlier this month.

The Constitution limits foreign ownership to 40% in key industries and economic sectors such as telecommunications, transport and electricity public utilities; agriculture, fisheries and forestry; construction; advertising; private radio networks and real estate.

Mr. Banayo also said the agreement will also pave way for more micro, small and medium enterprises (MSMEs) from Taiwan to enter the Philippines.

“Some 97% of businesses in Taiwan are MSMEs,” Philip T. Huang, deputy executive director of the market development department of the Taiwan External Trade Development Council (TAITRA) told BusinessWorld in Taipei on July 14.

Mr. Huang added that this segment employs 78% of the country’s labor force and credits the existence of these businesses as the “foundation of [ our] stable economy.”

Manila will welcome more than 200 companies from Taiwan in Sept. 29 to Oct. 1 as TAITRA and the Taiwan Association of the Philippines mounts the “first Taiwan Expo.”

Similar expositions have also been conducted in Indonesia and Vietnam earlier this year. TAITRA will also bring the expo to Malaysia and India.

Some of the companies joining the expo are Sauceco Food Co., Ltd., which specializes in organic miso and soy sauces and Noodles Origin, an 83-year old noodle factory.

Sauceco Food is currently available in 20 countries including the US, Canada and Japan.

Both Sauceco and Noodles Origin are looking to find local distributors during the September expo. —