By Beatriz Marie D. Cruz, Senior Reporter and Erika Mae P. Sinaking, Reporter
THE EUROPEAN UNION (EU) and Spain have formally joined the Luzon Economic Corridor (LEC) initiative, strengthening the Philippines’ efforts to attract high-value investments and position the country as a hub for maritime industries and advanced manufacturing.
“Today, we made history with the addition of two more partners in the Luzon Economic Corridor, which brings us to 13 countries in total,” Finance Secretary Frederick D. Go said during the inaugural LEC Investment Forum on Thursday.
“Their participation brings additional expertise, technology, capital, and global business networks that can help accelerate investments and develop the infrastructure to support the Philippines’ growth,” he said.
The LEC Investment Forum brought together hundreds of investors as the government seeks to attract investment to projects under the corridor, which is intended to link economic hubs Subic Bay, Clark, Manila, and Batangas.
The LEC is a multi-country partnership launched in 2024 by the Philippines, the United States, and Japan. In May, it was expanded to include Australia, Canada, Denmark, France, Italy, the Republic of Korea, Sweden, and the United Kingdom.
The EU’s participation in the LEC builds on its established trade relationship with the Philippines, said EU Ambassador to the Philippines Massimo Santoro.
“The addition of the EU and Spain further deepens Europe’s engagement with the corridor and expands the network of expertise, technology, financing, and business opportunities available to LEC projects,” the Department of Finance (DoF) said in a separate statement.
Spanish Ambassador to the Philippines Miguel Utray Delgado said Spain is looking to pursue projects in railways, modular infrastructure, aviation, shipbuilding, air-navigation management, and renewable-energy connectivity within the LEC.
“We stand ready to advance the corridor’s goals through technical assistance, private sector partnership and financing,” he said during the forum.
The DoF noted that the EU is aligning its €60-million Green Economy Programme and €20-million Digital Economy Package, the bloc’s initiatives to promote green investments and infrastructure, with its LEC priorities.
This is expected to help support renewable energy and energy efficiency, support green and circular development, secure digital connectivity, innovation, and skills development in the country, it added.
The Philippines is pitching around 38 investment-ready projects in the LEC across energy, water, transport, logistics, digital connectivity, and advanced manufacturing.
Around 18 of these projects carry a combined value of $20 billion, while the government has yet to determine the value of the remaining 20 projects.
According to a copy of the LEC dealbook, key LEC projects seeking private capital include the $6-billion Subic Clark Natural Gas Ecosystem and the $4.1-billion Sangley Point International Airport.
It is also eyeing private sector funding for the operations and maintenance (O&M) of the North South Commuter Railway Project (valued at $4 billion) and the Metro Manila Subway Public-Private Partnership O&M ($3 billion).
The Philippines and the US are pursuing partnerships in energy generation and transmission to attract investors to the corridor.
“We’re hoping that this would create an ecosystem where more investors will want to come and invest in the Philippines,” Heather Variava, US senior advisor for economic, energy, and business affairs ambassador, told reporters on the sidelines of the forum.
JOB GENERATION
Meanwhile, President Ferdinand R. Marcos, Jr. said the Philippines wants foreign-backed projects to generate jobs, technology transfers and local business opportunities in addition to bringing capital into the country.
Speaking at the forum, Mr. Marcos said the government’s aim in courting foreign investment for the corridor is to build local capabilities alongside infrastructure.
“We want investment that strengthens our economy and expands Filipino capability,” he said at the livestreamed event. “We want companies to establish long-term operations, transfer knowledge and technology, develop Filipino talent, and work with local suppliers.”
Mr. Marcos said he wants the Philippines to move beyond its existing role in semiconductor and electronics production toward design, research and engineering. He also cited shipbuilding, ship repair, marine engineering and critical minerals processing as areas where more value could be created locally.
“Our ambition goes beyond extracting and exporting raw resources,” he said. “We want more value to be created here through domestic processing, manufacturing, research, innovation, with strong environmental safeguards and clear benefits for affected communities.”
Edmund S. Tayao, president and chief executive officer of Political Economic Elemental Researchers and Strategists, said the Philippines could gain more from the LEC if foreign investors are required to develop local talent and work closely with domestic suppliers.
“Most fundamental would be requiring locators to rely on local talents,” he told BusinessWorld in a Facebook chat, adding that having Filipino management and technical personnel would allow workers to learn on the job and demonstrate the capabilities of Filipino professionals.
Mr. Tayao said the country’s infrastructure would also need upgrades to meet the requirements of technology-intensive investments, while local service providers should work closely with foreign companies operating in the Philippines.
At the same time, the Philippines is capable of hosting many of the LEC and Pax Silica investments being discussed,”Jose Enrique “Sonny” A. Africa, executive director of think tank IBON Foundation, said, noting that the country is already the ninth-largest exporter of semiconductors and a major assembly, testing and packaging (ATP) hub.
He said developing Filipino firms that can compete in ATP and move into higher-value segments is key to building an autonomous Philippine industrial base.
“Technology transfer doesn’t happen just because high-technology foreign corporations are present,” he said, adding that it “has to be negotiated, induced and even legally mandated” through Filipino equity and joint-venture requirements, local content and procurement targets, and technology-transfer agreements.