Art Fair Philippines points the way home

There was a hint of trouble on the eve of the second edition of Art Fair Philippines held in late February. Art dealer Michael Janssen's shipment of art by Ai Weiwei - including cans of milk formula to be installed in the shape of China and previously exhibited in Hong Kong - was being held without explanation by customs in Manila.

The exhibition and its opening at the Ayala Museum was delayed by one day to February 22, but it still seemed the entire exhibition might be postponed.

There was speculation of possible political undertones to the delay, given the fractious diplomatic relations between the mainland and the Philippines. Then suddenly, without explanation, the shipment was released hours before the art fair's gala opening on February 19.

It was no surprise that Janssen, with galleries in Berlin and at Singapore's newly opened Gillman Barracks, was promoting Ai in Manila. Despite not being on Hong Kong's art radar, the Philippines has excellent links with Europe and the US through its colonial connections.

Together with a well-educated diaspora, Manila's large middle class and a wealthy philanthropic sector that supports a variety of private museums, the city is a lucrative art market. Recognising this, Christie's, whose contemporary Southeast Asian art auctions have a longer history than auctions of contemporary mainland art, was prominent at the fair.

Despite the way Hong Kong's media extols the city as an important art market, it has predominantly been auction houses and Art Basel's Hong Kong edition that are the focus of collectors. The primary market - works in galleries that have never been sold on the market before - continues to struggle.

In contrast, Manila is riding a wave of enthusiasm for its domestic art. Many young Filipino artists promoted by galleries are able to make a decent living from sales, while older artists are being rediscovered by younger collectors and have become sought after - including Jaime de Guzman, who featured prominently in the fair.

Hong Kong's great advantage as a destination for overseas-sourced art is its free-port status, liberal taxation and financial reporting environment. Many places in Asia, including the mainland and Japan, have stringent customs regulations on art. Likewise, the Philippines' opaque customs regulations will limit the fair's future growth.