ASEAN Finance / CIER: US-Philippines cooperation heats up, Taiwanese investment in Philippines accelerates

(CNA reporter Pan Tzu-yu, Taipei, June 2) In the past, the Philippines was not a popular destination for Taiwanese investment in Southeast Asia. However, Kristy Hsu, Director of the Taiwan ASEAN Studies Center at the Chung-Hua Institution for Economic Research (CIER), pointed out that the US's clear support for the Philippines and the country's alignment with Western clients' demands for supply chain de-risking and decoupling from China have led to a significant increase in Taiwanese investment in the Philippines in recent years. CIER held a seminar today on the impact of the Trump administration's tariff policies on ASEAN supply chains and AI development. Hsu noted that since the COVID-19 pandemic, Taiwan's investment in the Philippines has been on an upward trend, reaching $257 million in 2025, a recent high, with strong momentum in the first four months of this year. Although there is still a large gap compared to Vietnam, the trend of increasing willingness to invest is clear. "Taiwanese firms realize that the Philippines will have a special advantage in cooperating with the US, especially in non-China supply chains," she said. Hsu mentioned that in interviews with over 10 companies, many stated that US clients requested them to set up or expand factories in the Philippines to supply the US market. Taiwanese manufacturing investment in the Philippines is mainly in electronics and semiconductor packaging and testing, and in recent years, they have entered the US AI data center (AIDC) supply chain. Investments are concentrated in Manila, Calabarzon, and Central Luzon, forming industrial clusters. Hsu analyzed the advantages as young labor, English proficiency, mature economic zone planning, proximity to Taiwan, and suitability for de-risking. Disadvantages include a lack of high-end talent, relatively high electricity costs, reliance on imported raw materials, and policy uncertainty. KPMG's Chang Yi-hung analyzed that AI development in Southeast Asia is very fast, with Singapore as a hub and Malaysia benefiting. She pointed out that Southeast Asia is no longer just a "China+1" alternative production base, but a region where supply chain resilience is prioritized.