It has become a tourist attraction, providing a taste of Vietnamese culture and French-Vietnamese cuisine to both local and foreign visitors. But it is now facing a looming crisis: it is running out of Vietnamese.
An offer by the United States to consider accepting more of these displaced Vietnamese as well as legal efforts by ethnic Vietnamese lawyers to resettle them in Western countries is steering the inhabitants of Viet-Ville out of their safe enclave in Palawan.
Nguyen Van Lam, assistant administrator of Viet-Ville says the community, which includes numerous houses, a noodle factory, two French bread bakeries, Catholic and Protestant churches and a Buddhist temple, now has only about 150 residents.
This is down sharply from more than 1,500 when the village was set up in 1996 after the closure of the last Vietnamese refugee camp in the Philippines.
Some of the Vietnamese have decided to live outside Viet-Ville, selling jewelry or operating noodle houses which are now a fixture of Palawan.
Many others have received permits to migrate abroad or are waiting in Manila to be interviewed by embassies, said Lam, who has been in the Philippines for 15 years.
The Vietnamese express gratitude to the Filipinos who welcomed them and there is little sign of ethnic strife between the two groups. But emigrating to the United States, Europe or Australia is still far more attractive than staying on.
Vietnamese migrants first began arriving in the Philippines after the fall of South Vietnam in 1975. The boat people who arrived in the country were given aid and shelter, unlike other Asian countries where they were persecuted and abused.
The United Nations put up a camp in Palawan to process the genuine refugees for resettlement and to screen out those not qualified for refugee status.
But when the refugee program ended, the Palawan camp was declared closed in 1996, and the Vietnamese left behind were set for forced repatriation.
A plane was waiting at the Palawan airport to fly out the last of the Vietnamese when the influential Catholic Bishops Conference of the Philippines and allied non-government organizations staged a protest, forcing the government to let them stay.
With the help of the church and financial support from Vietnamese communities in the West, Viet-Ville was set up to house these remaining who were then in a state of limbo: free to stay in the Philippines but unable to leave for any other country.
Filipino legislators were working on a bill to grant them permanent residency but this was abandoned when the Vietnamese shifted their attention to the renewed efforts for resettlement abroad.
Ethnic Vietnamese lawyers from the United States and Australia began helping the former residents of Viet-Ville go abroad.
The US government also announced in April that it would consider "resettlement interviews" for the remaining Vietnamese asylum-seekers if they had relatives in the United States, further encouraging Viet-Ville residents to try to depart.
At Viet-Ville, the restaurant still serves ethnic food but only the cook is Vietnamese. The waitresses and the general manager are Filipinos. So are the security guards, the souvenir shop operators and the workers manning the French bread bakery.
A stage where village residents once entertained restaurant patrons with Vietnamese music now has only traditional instruments on display. The musicians have all departed.
Some of the Vietnamese remaining in the camp are selling property in preparation for the move abroad.
Son Truyen, an 11-year-old girl, said she and her brothers and sisters did not have to go to school anymore.
"My father said we are going to Manila soon. I don’t know what we’ll do there," she said in the Filipino language.
"I want to go to the United States," she said, remarking that life was hard in Palawan despite having Filipino friends in school.
She has no memory of Vietnam and no desire to go there.
"My mother said it is even harder there," she said.
Xuan Thuy Nguyen, a 24-year-old woman who arrived with her family on a boat in 1998, said: "I like it here. The people are very kind."
She said that if the Vietnamese were really being accepted into third countries, perhaps her family should try to leave but quickly added: "For me, it is better here. I would like to stay."
Her father, Nguyen Xuan Thieu, 50, a former schoolteacher in Nhatrang, South Vietnam, said he suffered persecution under communist rule and just wanted to "stay in any country which had freedom: the US, France and even the Philippines."
He said he could live with his brother in Canada or his sister in the United States but had mixed feelings about leaving.
"I want to go out of the Philippines and I want to stay. (The two sentiments) are about the same," he said.