By Monsi A. Serrano
Luzon being the core economic zone of the Philippines that accounts for more than 70% of the country’s Gross Domestic Product (GDP) is set to receive infrastructure development funds with commitments from the United States and Japan.
This was revealed at the Indo-Pacific Business Forum in Manila attended by US Senior Advisor to the President for Energy and Investment Amos Hochstein.
Others joining the panel were Acting Special Coordinator for the Partnership for Global Infrastructure and Investment (PGI) Helaina Matza, Philippine Senior Advisor to the President for Investment and Economic Affairs Frederick Go, and Japan Ministry of Foreign Affairs Director-General for International Cooperation Bureau Ishizuki Hideo.
They made up the Luzon Corridor Steering Committee inaugural meeting, aimed at driving infrastructure investment and development in the area.
The Steering Committee aims to implement the Trilateral Leaders’ commitment in April to develop the Luzon Economic Corridor under the PGI Indo-Pacific Economic Framework (IPEF) Investment Accelerator.
The partners discussed priority sectors for engagement and reviewed potential projects and areas of interest, committing to future meetings on a quarterly basis.
The Luzon Economic Corridor is the first PGI economic corridor in the Indo-Pacific region. The Corridor will support connectivity among Subic Bay, Clark, Manila, and Batangas as well as facilitate strategic, anchor investments within each hub in high-impact infrastructure projects, including rail, port modernization, agribusiness, and clean energy and semiconductor supply chains and deployments.
Speaking to the media, Hochstein said, “We are the US government USTDA together with other multilateral development agencies are going to support the Government of the Philippines and whatever is necessary. Step one in all of these is usually to do a feasibility study to identify what is needed.”
He noted that the trilateral efforts of the US, the Philippines, and Japan will put pressure on the agencies of the government of the Philippines to accelerate its internal process to make things easier for companies to understand what the rules of the game are, to make sure that they have their financing incentives from tax to permitting and land use across all different departments of the government.
“The US is going to continue to work with our agencies to support that effort. Again, USDA has done part of what it does so well in feasibility studies around the world. We’ll continue to work with the government Philippines to see if they need the support there. As far as timeline projects it will be done as fast as possible,” Hochstein said.
The need to make everything efficient is to ensure the timely and successful implementation of the programs is empirical.
“We’re in a global competition, for resources for investment for projects for economic opportunity. The faster the government works, the easier it is for the private sector to make those investments for the whole purpose will happen,” Hochstein explained.
Speaking to THEPHILBIZNEWS on the criteria for US and Japan to focus on Luzon, Hochstein noted the Biden administration’s concept of quarters. “To do that, we look at where we can invest in 150 countries or we can invest in just a small number.”
“Here in the Philippines, we decided first of all within the Indo-Pacific. We wanted to focus on the Philippines because the Philippines is a fast-growing economy. A very capable country with a workforce that is dynamic and capable and educated,” Hochstein explained.
Hochstein also mentioned the history of the Philippines with the United States and noted that both security and economic aspects have been considered since there are already multiple American companies doing business in the country.
“So we wanted to invest in the Philippines because it’s a friend, a partner and an ally and it has all the right ingredients for growth,” he said.
In choosing Luzon for its investments, rather than Visayas or Mindanao, Hochstein said: “[We] chose Luzon not because we don’t want to invest in the rest of the Philippines, but rather Luzon has the biggest share of traffic in all of the Philippines. It has a concentration of companies, global companies that are already here, and a workforce.”
“Therefore, those jobs that will be impacted will not only be because of the direct investment, but because every investment will create secondary and tertiary jobs in the economy. So again, it’s not to say that we don’t want to see companies going to the Philippines but rather to say this is an area that can have a higher rate of success by focusing and you get that success and investments in multiple sectors,” he concluded.