Luzon Economic Corridor seen to increase jobs, investments

By Justine Irish D. Tabile, Senior Reporter

THE LUZON Economic Corridor (LEC) will help make the Philippines more resilient to external shocks by generating more jobs and attracting greater foreign investment interest, the Finance department said.

“The LEC is about doing all the work to provide those jobs. We build the infrastructure, the private sector comes in, invests in business, gives jobs to Filipinos,” Finance Secretary Frederick D. Go said on the sidelines of the LEC Reception on Monday.

Mr. Go said creating “meaningful” jobs is key to building a sustainable and shock-resistant economy, as steady incomes would allow households to continue spending despite external headwinds.

“We need everybody to have meaningful jobs. That is how you really build a sustainable economy,” he said. “Because when everybody has meaningful jobs, it does not matter what the shocks are. Life can go on because people have a good source of income.”

The Philippine economy grew by a weaker-than-expected 2.8% in the first quarter amid lingering effects of last year’s corruption scandal and soaring fuel prices due to the Middle East conflict.

The weaker growth came as household final consumption expenditure — a key driver of the economy — slowed to 3% from 5.28% a year earlier and 3.8% in the previous quarter.

Asian Development Bank (ADB) Country Director for the Philippines Andrew Jeffries said the corridor accounts for a large share of the country’s gross domestic product (GDP).

“In general, 60% of the whole country’s GDP is more or less within this corridor… So, I guess the infrastructure needs are very large. And so, some of our ongoing projects are supporting all of that,” he told reporters.

“Of course, because it’s such a large part of the whole Philippine GDP, it’s a very important corridor to keep developing. And… there are some transportation and other bottlenecks that need to be addressed.”

The ADB is supporting several infrastructure projects in the region, including the North-South Commuter Railway and Bataan-Cavite Interlink Bridge. It also has a loan facility funding detailed engineering designs for future rail projects.

The LEC reception was held ahead of the steering committee meeting and the official launch of the LEC Partners Initiative.

Asked for his expectations, Mr. Go said the steering committee meeting will serve as an avenue to push LEC projects forward.

“The top projects will always be the infrastructure. So, it is always going to be the ports, and the railway that connects the ports, and then the airport — how the airports interconnect with those railways to create better logistics within the corridor,” he said.

Other infrastructure projects under the LEC initiative are the Subic-Clark-Manila-Batangas Railway and the modernization of ports and airports within the corridor.

“The interest in our country has never been better. So many companies are so interested in the Philippines. The LEC is one of the catalysts to our development,” Mr. Go said.

On Monday, he said the LEC partnership has been expanded to include Australia, Denmark, France, Italy, South Korea, Sweden, and the United Kingdom.

“Before we kept talking about the LEC, there were only three of us. Now, there are 10. So, interest in the country is at its peak.”

The LEC is a trilateral agreement aimed at improving connectivity across Luzon’s key economic areas, particularly Subic Bay, Clark, Metro Manila, and Batangas. Under the initiative, partner countries provide technical assistance, financing, and facilitate private sector investment.

However, US Ambassador and Department of State’s Bureau of Economic, Energy and Business Affairs Senior Advisor Heather Variava said building infrastructure within the corridor alone is not enough.

“We must streamline complex regulatory structures to make it easier for businesses both in the Philippines and internationally to invest in the Philippines with confidence,” she said.

“This initiative does not only create prosperity here in the Philippines; it opens up opportunities for American and like-minded businesses as well.”

She said the government should also continue engaging the private sector and encourage businesses to participate in the LEC initiative.

“The success of the LEC depends on partnerships like the ones we are building today, and together we can create lasting prosperity, strengthen our economic ties, and demonstrate the power of like-minded nations working towards a common goal.”