Taiwan curbs on the Philippines 'to cost HK$2.3b'

Taiwan will not be left untouched if it punishes the Philippines for the death of a fisherman killed by its coastguard, an economist warns

PUBLISHED : Friday, 17 May, 2013, 12:00am
UPDATED : Friday, 17 May, 2013, 6:53am

The sanctions slapped on the Philippines by Taiwan in the escalating row over the shooting of a Taiwanese fisherman are expected to cost Manila an estimated NT$9 billion (HK$2.33 billion) in lost revenue a year, according to Taiwanese officials.

But a Taiwanese economist said the economic impact on the Philippines would not be that serious and that Taiwan would be likely to suffer more if Taipei imposes the trade sanctions on Manila called for by some Taiwanese politicians.

We have received many calls from our clients seeking to cancel their trips to the Philippines
Taiwanese Travel Agency

Taiwan stepped up its diplomatic reprisals against the Philippines yesterday in protest at the killing of a Taiwanese fisherman by the Philippine coastguard last week.

Insisting that Manila had not shown sufficient sincerity in formally apologising for the death of Hung Shih-cheng, 65, Taiwan announced 11 retaliatory measures against Manila. The sanctions, all effective immediately, include a freeze on the hiring of Filipino workers, the recall of Taipei's envoy in Manila, a demand that the Philippine envoy to Taipei return home, the imposition of barriers to tourism and the suspension of various government exchange and co-operation programmes.

Taiwanese officials and media said that the hiring freeze and a warning against visiting the Philippines were the most severe reprisals. Taiwan's Council of Labour Affairs said the hiring freeze included a refusal to approve applications by Filipino workers seeking employment in Taiwan and a ban on Filipinos who had already obtained employment letters and working permits from entering Taiwan.

"This, in effect, would bar some 35,000 Filipino workers from working in Taiwan a year," said Lin San-kui, director of the Bureau of Employment and Vocational Training.

Council officials estimated that the hiring freeze would cost the Philippines about NT$4.8 billion a year. Currently, 87,000 Filipinos work in Taiwan.

About 210,000 Taiwanese visited the Philippines last year, the Taiwan Tourism Bureau said, making the island one of the top 10 sources of visitors to the Philippines. At least 150,000 were tourists, officials said, adding that a rough estimate showed they had spent at least NT$3.75 billion on airfares and hotel expenses a year.

Taiwanese travel agencies said yesterday that they had noticed a sharp drop in demand for sightseeing trips to the Philippines. "We have received many calls from our clients seeking to cancel their trips to the Philippines," an agent at the Phoenix Travel Agency in Taipei said.

Asked if it would affect the agency's business, the agent said the Philippines, especially Boracay, was one of the most popular destinations for Taiwanese tourists "but with the travel warning, we will have to abide by the government's move".

Under the sanctions, Taiwanese have been asked not to visit the Philippines, and Taiwanese travel agencies also face fines of more than NT$10,000 if they continue to organise Philippine tours for Taiwanese tourists.

Taiwanese cabinet officials said it was hard to put an exact figure on the cost to the Philippines of the suspension of various exchanges, but said it would be at least NT$200 million a year.

Economists, however, said the Philippines was actually facing quite limited losses.

"Given there are some 10 million Filipino workers overseas, Taiwan is not among the major destinations for Filipino workers," said senior researcher Wu Hui-lin from the Chung Hua Institution for Economic Research in Taipei. He cautioned that if Taipei sought to raise the stakes by slapping trade sanctions on Manila, it might not be in Taiwan's favour, given it enjoyed a US$6.77 billion trade surplus with the Philippines last year.