Cebu business wants fast diplomatic resolution of PH-Taiwan conflict

The escalation of the rift between the Philippines and Taiwan will not be good for either parties, Cebu business leaders say.

In a statement sent to Cebu Daily News, Philexport Cebu Executive Director Fred Escalona said prolonged resolution of the tension would affect the country’s tourism, services and foreign currency remittances.

In terms of trade however, the country may enjoy an upper hand as Taiwan’s imports to the country is bigger than our exports to the renegade Chinese province.

“In terms of trade, Taiwan is our number 8 market for exports with export value at $1.9 billion in 2012, mostly electronic products (61.9 percent) and chemicals (14.6 percent),” said Escalona.

On the import side, Escalona said that Taiwan is the country’s top five supplier with import value reaching $4.8 billion last year for electronics (45.8 percent) and petroleum products (23.9 percent).

Total merchandise trade with Taiwan in 2012 stood at $$6.5 billion, in favor of Taiwan.

“Ergo, they will suffer more should a trade war develop and escalate more. The current tension should be dealt with diplomatically and there should be some level of transparency in the investigation on the death of the Taiwanese fisherman,” said Escalona.

“Should the problem worsen, tourism will suffer with lesser tourists from Taiwan coming, lesser airline seat sold, tour companies will loose this market, hotels, resorts, restaurants and more other businesses related to tourism,” said Escalona. (see related story on page 22: Taipei – Aklan flights suspended)

Escalona added that the services sector or the overseas Filipino workers market is also likely to suffer with many Filipinos currently in Taiwan as overseas contact workers. There are about 85,000 Filipino workers in Taiwan. About 3,000 are Cebuanos

According to Cebu Chamber of Commerce and Industry president Lito Maderazo, the tension is highly diplomatic and should not threaten businesses directly unless the issue will further escalate.

“That’s a bit of a concern but Taiwanese government cannot dictate to Taiwanese businesses. Our Overseas Filipino Workers play an important component of their business competitiveness. We should not also surrender our national dignity just because of economic reasons,” said Maderazo.

Cebu Business Club president Gordon Alan Joseph agreed saying this too shall pass.

“While the loss of life is deplorable, Taiwanese fishermen have been illegally fishing in the Philippine waters for decades. We have the right to protect our waters. They should also police their fishing fleets. We will have no choice but to apologize I believe. If they remain belligerent then so be it. It will be one less country to be reliant on,” said Joseph.

Tourism

Major hotel chains in Cebu have mix views on the matter.

Shangri-la’s Mactan Island Resort and Spa director of sales and marketing Agnes Pacis describe the current tension as “unfortunately timed” with Cebu Pacific, the country’s leading low cost carrier, planning to open its Cebu – Taipei flights in July this year.

“While our numbers are small, currently less than 1 percent, we can’t trivialize its effect on Cebu in the eve of Cebu Pacific’s maiden direct flights to Taipei in July plus the seasonal flights we get over peak periods like Chinese New Year. Any new market we open up for Cebu is potential gain for the city and the incident is unfortunately timed,” said Pacis.

Other tourism stakeholders said they are positive that a peaceful resolution on the issue will be arrived soon.

Islands Group president Jay Aldeguer said that while the issue may have short-term effects on the industry.

“This is not the first time that hostilities between neighbors have occurred,” said Aldeguer.

Hotel Resort and Restaurant Association of Cebu president Hans Hauri said that the stakeholders are hoping the Taiwanese tourists are not discouraged from visiting our shores.

As of December last year, total Taiwanese tourists that visited Cebu was at 181,738, which was a 19.13 percent growth from 2011 arrivals. They are our fifth biggest tourist group last year based on figures from DOT.