TAIPEI, Taiwan — Taiwan is increasingly turning to the Philippines as a strategic link in “non-China” supply chains, with Taiwanese investment in the country reaching $257 million in 2025 as companies diversify their production amid geopolitical tensions and the US-China trade friction.

Kristy Hsu, director of the Taiwan Asean Studies Center at the Chung-Hua Institution for Economic Research (CIER), said several Taiwanese companies had been asked by their US clients to establish or expand their factories in the Philippines to serve the American market.

Hsu said the Philippines’ young workforce, English-language capabilities, economic zones, investment procedures and proximity to Taiwan make it increasingly attractive to Taiwanese companies seeking to diversify their production networks.

While Taiwanese manufacturing investment in the Philippines remains concentrated in electronics and semiconductor packaging and testing, the relationship is expanding into artificial intelligence, agriculture, food security, and renewable energy.

Yu-Lin Huang, secretary general of the International Cooperation and Development Fund (TaiwanICDF), told DAILY TRIBUNE on 21 August that Taiwan and the Philippines “need to work together.”

Huang pointed to Taiwan’s expanding agricultural programs in the Philippines, saying TaiwanICDF had increased its agricultural incubation centers from one to 10 in different regions.

Tech transfer offered

The programs aim to address food security while providing Filipinos with higher-quality vegetables and fruits, he said.

Huang said TaiwanICDF is also discussing cooperation with the Philippines in AI training, incubation, and acceleration.

“And that’s my hope that we can start this kind of cooperation very soon,” he said.

The Taiwanese official linked such technology cooperation to the challenge posed by a much larger power.

“To resist aggression from a big country, we need to be smart. We need to be smart enough to develop our asymmetric means to counter the aggression,” Huang said.

“So, AI, I believe, is the future for this kind of endeavor,” he added.

From chips to food, energy

The shift is already visible in the semiconductor and electronics industries.

In October 2025, the Taiwan Electrical and Electronic Manufacturers Association and the Semiconductor and Electronics Industries in the Philippines Foundation signed an agreement to strengthen green manufacturing and sustainable supply-chain cooperation.

The Philippine Economic Zone Authority (PEZA) has also been actively courting Taiwanese investors.

In March 2026, a PEZA investment forum in Taipei drew more than 100 representatives of Taiwanese companies.

A Taiwanese electric-vehicle bus manufacturer was considering a Philippine facility worth about US$25 million, while a food manufacturer was also exploring an ecozone facility.

As of December 2025, PEZA said it had registered 71 Taiwanese companies, with more than P45 billion in investments and over 20,000 direct jobs in the Philippines.

But Taiwan’s next wave of cooperation with the Philippines could extend beyond manufacturing.

TaiwanICDF is implementing a 2026-2029 agricultural technology project to mentor 30 Philippine enterprises and introduce Taiwanese agricultural technologies and services to local businesses.

Yu-Yin Wu, assistant research fellow at CIER’s Regional Development Study Center, told DAILY TRIBUNE that food and agriculture could develop into a broader industrial ecosystem involving logistics, food processing, and machinery.

“The food and agriculture ecosystem will include many industries, potentially,” Wu said. He also identified geothermal energy as another potential area of cooperation.

“I think the Philippines is really good at geothermal,” she said, noting that Taiwan has been developing geothermal technology for decades.

For Wu, the Philippines’ appeal goes beyond its industrial capabilities.

“And, as I said, the creativity of the Filipinos is quite attractive to Taiwanese companies,” she said. “So those industries that have creativity, in those fields, we can discuss how to strengthen cooperation.”