MANILA -- Last April, when Taiwan's economic minister Chen Li-an came to the Philippines to explore new investment opportunities, he might have been expected to be met with open arms given Manila's desperate need for fresh foreign capital.

Instead, he arrived with all the fanfare of a boatload of Vietnamese refugees sneaking into Manila Bay at midnight.

Chen's cabinet counterpart, Trade and Industry Secretary Jose Concepcion, refused to see him publicly, then later hosted a late-night dinner for Chen at his home. Concepcion later denied the dinner took place, although several Taiwanese and Filipino officials confirmed it.

Next, Chen went to see President Corazon C. Aquino at Malacanang Palace, although Aquino's press secretary later denied that any such meeting took place. Aquino herself balked and refused to answer a direct question on whether she received Chen. The April 23 meeting was detailed in the Taiwanese press.

All of the secrecy, the back-door meetings and public denials hardly seem a fitting reception for the chief economic official of the Philippines's second-largest investor, its closest neighbor and one of this country's most important trading partners.

Yet secrecy, and some official confusion, has been the nature of Philippine-Taiwan relations since 1975, when then-president Ferdinand E. Marcos opened ties to Beijing, committed his country to a "one-China policy" and agreed to sever all official links to Taiwan, a country that successive Philippine presidents had lauded as their staunchest anti-communist ally in the Pacific.

None of it has slowed down Taiwanese investment here.

Taiwan officially invested $149 million in the Philippines last year -- mostly in small manufacturing, textile, chemical and electronic plants -- catapulting Taiwan to the level of the second largest foreign investor here, behind only Japan and well ahead of Hong Kong and the United States. In 1987, by contrast, Taiwan was only this country's sixth largest investor.

The Philippines clearly is not the only beneficiary of Taipei's economic outreach, as Taiwanese cash has become second only to Japan's in fueling the dynamic economic growth of the entire Southeast Asian region. Taiwan also is now the second-largest foreign investor in both Thailand and Malaysia, where it pumped $879 million and $785 million respectively last year. Indonesia, which still does not have official relations with the mainland, received $150 million in Taiwanese investment last year.

Taipei also has shown an early interest in the newly emerging markets of Indochina, promising to develop two industrial zones in Ho Chi Minh City and signing an air transportation agreement that will allow direct flights between Taiwan and Vietnam.

In the process of spreading its wealth, Taiwan has managed to overcome some of its official isolation by forging closer, quasi-diplomatic status with its economic and trading partners. And most Southeast Asian countries are eager to benefit from Taiwanese largesse, actively encouraging investment from Taipei and never shying away from official meetings with Taiwanese officials.

Malaysian Prime Minister Mahathir Mohamad personally has traveled to Taiwan to secure new investments. In Indonesia, President Suharto reportedly assured Taiwanese Economics Minister Chen that economic ties between their two countries would not be affected, even as Jakarta goes about restoring normal diplomatic ties with Beijing. Last year, Taiwanese president Lee Teng-hui made an official visit to Singapore, which does not recognize either China.

And in Thailand, a Foreign Ministry spokesman interviewed by telephone explained Bangkok's position by saying; "We don't have any problem in conducting foreign policy towards China and economic and trade relations with Taiwan."

In the Philippines, the "one-China" policy has come under increasing challenge lately as Taiwan -- pursuing a global outreach drive it calls an "elastic" foreign policy -- has expanded its economic clout, taking advantage of its own huge capital surplus, cheap Filipino labor, the proximity of the two countries and the informal network of Manila's close-knit Chinese business community who speak the same Fukien dialect.

As Taiwanese business here has exploded, so has the congressional clamor for a new, more flexible policy that would restore official ties with Taipei, at least in the economic field.

"Our biggest problem today is economic development," said Rep. Cornelio P. Maskarino, an advocate for full diplomatic ties. "The Philippines today is the poorest country in ASEAN {the six-nation Association of Southeast Asian Nations}. Taiwan, with a reserve of about $70 billion, is willing to help us. With the establishment of diplomatic relations with Taiwan, it would spur economic development in our country."

Maskarino is coauthor of a bill, currently under study by a special seven-member committee, to establish trade and economic ties with Taiwan and extend legal protection to Taiwanese businesses and citizens here.

Various business analysts here, including Tan Jen Liu, Taiwan's official representative and de facto ambassador in Manila, say the actual total of Taiwanese investment in the Philippines may be two or three times the reported amount, since much of it comes in through undisclosed channels into real estate, into the Manila stock market and, with Taiwanese as silent partners, into joint ventures with Filipinos.

Taiwanese investors are believed to have caused the current rise in property values in the Philippines -- which continue to climb despite predictions of a decline following last December's bloody coup attempt.

According to figures from the Taipei-based Industrial Development and Investment Center, Taiwan already has pumped an additional $91 million in reported investments into the Philippines for the first five months of this year. Philippine investment board officials estimate that so far this year, Taiwanese investment already has increased 13 percent over last year.

Most Taiwanese investment projects here are small- and medium-scale, often single-proprietor and family ventures. Tan Jen Liu said there are now 1,000 Taiwanese factories here, and 80-percent of those are small, with less than $1 million in capital investment. But their big projects include a controversial Luzon petrochemical plant, condominiums, and a planned multibillion-dollar city-within-a-city called Asiaworld being put up by a Philippine-born Taiwanese tycoon, Tan Yu.

The Taiwanese have been less concerned than their Japanese and American business counterparts about investing heavily in a country that has experienced a half-dozen coup attempts and still suffers from seemingly chronic political instability. Several business analysts said the Taiwanese actually may see the instability as an opportunity to invest while prices for real estate and stock remain cheap.

The Chinese Embassy here accuses Taiwan of using its business activity here, and the promise of aid, as a kind of economic blackmail -- dollar diplomacy to force a heavily indebted government to resume some official ties. "The Taiwanese authorities think they have got muscle with dollars," said Guo Baocheng, first secretary of the Chinese Embassy in Manila. "If they don't have relations with a country, they try to squeeze in and open it up."

But Tan Jen Liu, Taiwan's representative, said it is simply a case of pragmatic business people taking advantage of opportunities in the Philippines, and that the Taipei government is not involved. "We are not using business as leverage," he said.