Investment News Analysis

Subic Bay – Taiwanese firms ready to ship in

Subic Bay Freeport Zone in Pampanga is firmly in the sights of Taiwan’s port operators as the island’s own ports and yards have reached operational capacity. Relocation to the Philippines, they believe, would save their industry from stagnating and allow them to expand.

The Taiwan International Ports Corporation (TIPC) has already held talks with the zone’s operator and manager, Subic Bay Metropolitan Authority (SBMA), and has offered to invest and assist with developing the Port of Subic to make it a “certified major port destination in Asia”. SBMA has around 1,000 hectares of fallow land, earmarked for such a project, which lies along the Subic-Clark-Tarlac Expressway.

According to TIPC Chairman, Chih-Ching Chang, many Taiwanese shippers are planning to invest overseas and Subic Bay, because of its geographical location and its dry-docking, berthing and international-grade ship-building facilities, is among their preferred destinations. Overseas yard operators in Subic include Singapore’s Keppel Corporation and South Korea’s Hanjin Heavy Industries and Construction.

Officials from Kaohsiung Port, Kaohsiung District Economic Development Association, and United Development Corp. accompanied Chang on an inspection tour of Subic Bay earlier in the year. Now SBMA and TIPC will meet with Taiwan’s shipping companies to invite them to send their bulk and containerised cargoes to Subic.

In 2015, port revenue at Subic realised US$34.67 million, a 25% increase on the previous year and containerised cargo volumes rose from 77,618 (20-foot equivalent units) year on year to 123,558.

Another attraction for Taiwanese companies is Subic Bay Gateway Park which is managed on behalf of SBMA by Taiwan’s Century Development Corporation, an agency established by Taiwan’s Ministry of Economic Affairs in association with the private sector, to work with local and provincial governments across Asia to develop technology and industrial parks. Among Gateway Park’s residents are Taiwanese firms, Wistron Corp., Taian Electric Co. Ltd., Taiwan Hitachi, and Tong Lung Metal Industry Co.

But Taiwanese businessmen will also have been encouraged by the prompting of recently installed Taiwanese President, Tsai Ing-wen, for her country to loosen its economic reliance on China – the Mainland’s economic slowdown being one reason – and forge stronger links with the Association of Southeast Asian Nations (Asean). Two-way trade between Taiwan and the Mainland topped US$190 billion last year with 40% of the island’s exports going to China.

“We need to turn Asean into an extension of Taiwan’s domestic market as soon as possible,” said James Huang, who was appointed by Tsai to head up the New Southbound Policy Office. Establishing commercial partnerships with Asean and South Asia is to be a main plank of Taiwanese external economic strategy. Taiwan is competitive in the agriculture, aquaculture and IT sectors.

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