Luzon Economic Corridor draws in 7 new countries

MANILA, Philippines — Economic development in Luzon is gaining more traction after the governments of the Philippines, United States and Japan welcomed seven more countries as partners.

The partnership for the development of the Luzon Economic Corridor (LEC) has been expanded to include Australia, Denmark, France, Italy, South Korea, Sweden and the United Kingdom.

Launched in April 2024, the LEC is the first initiative under the G7 Partnership for Global Infrastructure and Investment corridor in the Indo-Pacific, aimed at promoting investments in infrastructure.

Through the development of the LEC, the aim is to enhance connectivity between Subic Bay, Clark, Manila and Batangas, while creating high-quality jobs.

“The expansion of the LEC partnership demonstrates the power of collaboration among like-minded nations committed to transparency and shared prosperity,” Finance Secretary Frederick Go, who also serves as co-chair of the LEC Steering Committee, said.

“Together, we are building infrastructure that will improve daily life for millions of Filipinos and create new opportunities for businesses, industries and communities in our partner countries and across the region,” Go added.

In line with the aim of promoting a free and open Indo-Pacific, as well as fair and transparent economic development, LEC’s new partners will provide technical assistance and financing, as well as facilitate private sector investments, particularly on transport, energy and digital infrastructure.

In particular, Australia is mobilizing investment in the LEC through its Manila Deal Team, reinforced by technical assistance under the Partnerships for Infrastructure program and a new P1.9-billion ($32.6-million) partnership with the Philippines on inclusive economic growth.

Meanwhile, Denmark’s contribution in the LEC will involve a shipbuilding initiative, which aims to create 10,000 jobs.

France will help strengthen connectivity in the LEC by financing 100 bridges through official development assistance and providing industrial capacity building through a foreign direct investment project in the aeronautics sector.

As for Italy, it will help in infrastructure development by increasing its public financial support to facilitate private sector investment from Italian companies in the transport, semiconductors and manufacturing sectors.

For its part, South Korea is helping enhance transport and digital connectivity and achieve sustained economic growth along the LEC through official development assistance and public-private partnership initiatives, including a P1.5 billion ($25.6million) grant to establish the National Cyber Security Center and the Ninoy Aquino International Airport modernization PPP project.

Sweden’s contribution is through a P74-million ($1.2 million) grant to fund a feasibility study on signaling systems and operational models of the Subic-Clark-Manila-Batangas freight railway, LEC’s flagship project.

The UK is providing support through technical assistance and P411 billion ($6.8 billion) in export finance. It is also mobilizing capital for infrastructure and energy projects.

“The expansion of the LEC partnership shows what we can accomplish when like-minded nations unite around strategic infrastructure and shared prosperity. This initiative is creating real opportunities for US business, our Philippine partners and investors across the Indo-Pacific while countering exploitative infrastructure practices with a better alternative,” US senior advisor for economic, energy and business affairs Heather Variava said.