TAIPEI, Taiwan -- Taiwan and the Philippines restored relations this week after working for three months to ease anger over a fishing boat shooting incident that gutted normally friendly ties between two Pacific Rim allies. On Thursday night, the Taiwanese Foreign Ministry resumed bilateral exchanges and canceled economic sanctions that hurt both sides, particularly the impoverished Philippines. It had imposed the sanctions after Manila's coast guard on May 9 shot and killed a 65-year-old Taiwanese fisherman in overlapping waters claimed by both governments. Resumption of ties is likely to excite the United States, which wants the two pro-Washington governments to get along as it tries to strengthen military cooperation in the region -- part of a 2-year-old pivot to Asia that some say is geared toward containing China. Washington also counts Seoul and Tokyo among its Asian allies. Taiwan said the Philippines had met its demands: a formal apology, compensation to the slain man's family, the start of fishing-rights talks and agreement to prosecute the shooters. The turning point came Wednesday when Manila recommended murder charges against eight coast guard crew members. "The key is that they agreed to prosecute as a murder issue, not self-defense," said Alex Chiang, associate professor of international politics at National Chengchi University in Taipei. Taiwan had recalled a de facto ambassador and imposed economic sanctions because it found Manila's earlier response too defensive. But the sanctions weakened two-way trade that was worth about $11 billion last year, making the Philippines Taiwan's 12thlargest partner. One sanction, a travel advisory, grounded flights and canceled bookings in the Philippines, which looks to foreign tourism as a pillar of its economy. Taiwan contributes 4% to foreign tourism in the Philippines. Another sanction froze migrant labor, affecting 88,000 Filipino workers including prized English-literate employees of Taiwanese factories. About 3,000 would have left every month as their contracts ended. "It's a hard-learned lesson that this kind of issue will not be beneficial to either side," Chiang said. Next time they will react correctly and quickly. Civilian as well as official anger over the shooting had raged partly because Taiwan, which is diplomatically isolated by its economically more powerful rival, China, bristles when snubbed by other governments and did not want the Philippines to treat the case lightly. Taiwan President Ma Ying-jeou, faced with approval ratings around 20%, has also sought foreign policy laurels to earn publicity. In the Philippines, the coalition government of President Benigno Aquino III had just come off midterm legislative elections as Taiwan vented about the coast guard shooting, delaying Manila's response. In the next month, the two sides expect to hold talks on their overlapping waters in the 160-mile-wide Luzon Strait, where the shooting occurred, to reduce the chances of another incident. Jennings is a special correspondent.