The Luzon Economic Corridor (LEC) is gaining traction, almost two years after I wrote about it in this paper.
The LEC has now drawn interest from Australia, Canada, Denmark, France, Italy, South Korea, Sweden and the United Kingdom, after being initially backed up by the United States and Japan.
The expanded partnership is an ominous sign that the big infrastructure initiative will be a big success and a major job creator in the regions it covers.
The LEC is an ambitious project that seeks to accelerate infrastructure and industrial development along a key corridor linking Subic Bay, Clark, Metro Manila and Batangas province.
It is the first Partnership for Global Infrastructure and Investment (PGI) corridor in the Indo-Pacific region that aims to boost economic growth, enhance supply chain resilience and create high-quality jobs.
I am personally bullish on this initiative because it will greatly boost connectivity from Subic Bay to Batangas through massive investments in rail, energy, digital systems and manufacturing.
Finance Secretary Frederick Go, who co-chairs the LEC Steering Committee, summed it up. The Philippines is building an infrastructure network that ‘will improve daily life for millions of Filipinos and create new opportunities for businesses, industries and communities.’
The participation of more countries in the initiative is a vote of confidence on the administration of President Ferdinand Marcos Jr. The new partners have committed specific technical and financial resources to ensure the corridor’s success.
Australia, for one, is mobilizing investments through its Manila Deal Team, backed by a P1.9-billion partnership for inclusive growth. Denmark is aiming to create 10,000 jobs by revitalizing the Philippine shipbuilding industry and advancing green maritime innovation.
France, for its part, is financing the construction of 100 bridges and boosting industrial capacity through a foreign direct investment project in the aeronautics sector.
Italy, meanwhile, is funding private sector investments in semiconductors, transport and manufacturing.
South Korea is providing a P1.5-billion grant for the National Cyber Security Center and supporting the Ninoy Aquino International Airport (NAIA) modernization.
I was not expecting the early success of the LEC. But our foreign partners clearly saw the big potential of this infrastructure project.
Sweden is funding a P74-million feasibility study for the signaling systems of the Subic-Clark-Manila-Batangas freight railway.
Sweden Ambassador to the Philippines Anna Ferry saw the LEC as a great opportunity for her country to contribute to the Philippines’ development and competitiveness.
The UK, on the other hand, is deploying its Growth and Investment Partnerships (GIP+) toolkit, providing up to P411 billion in export finance for infrastructure and energy.
US Senior Advisor for Economic, Energy and Business Affairs Ambassador Heather Variava describes the expanded partnership and new commitments as a sustainable alternative to traditional infrastructure models in the region.
‘This initiative is creating real opportunities…while countering exploitative infrastructure practices with a better alternative,’ says Variava.
Japanese Ambassador to the Philippines Endo Kazuya is also bullish on the LEC. The LEC, in his own words, is expected to create thousands of high-quality jobs and strengthen regional supply chains, positioning the Philippines as a critical link in the Indo-Pacific’s economic architecture.
Digital connectivity and advanced manufacturing initiatives serve as the key aspects of the corridor. These projects will position the LEC as a strategic link in global technology supply chains and complement the Pax Silica initiative, to which the Philippines, Japan and the US are also signatories.
The Pax Silica initiative is a US-led coalition of 13-plus countries designed to secure AI, semiconductor and critical mineral supply chains. The economic bloc may have a geo-political undertone because it focuses on countering China’s tech-manufacturing dominance.
But economic alliances have their own merits and are productive. The LEC, as I wrote earlier, is about a new growth corridor, infrastructure, jobs, urban decongestion, economic inclusion, green energy and logistics.
Any initiative that creates jobs and reduces the poverty incidence in the Philippines is always welcome.