The trilateral agreement, known as the Luzon Economic Corridor (LEC), which the Philippines, Japan and the United States signed in April last year, is expected to proceed since Washington has excluded Manila from its foreign aid freeze.
Astro del Castillo, managing director of First Grade Finance Inc., said the projects directly related to the economic corridor are expected to push on.
The Trump administration has made known its strong commitment to the Indo-Pacific region, Del Castillo said in a text message to Malaya Business Insight on Tuesday.
The economic corridor aims to build seamless transport and transportation facilities that will connect Subic Bay in Zambales, Clark in Pampanga, Manila in the National Capital Region and Batangas in Calabarzon.
The idea is to attract investors in clean energy and semiconductor manufacturers along the economic corridor where the supply chains can move smoothly by land and sea, through interconnected railroad and seaport systems.
Washington on Monday announced the Philippines is exempted from the freeze on foreign aid.
Del Castillo said the announcement proves that the US remains committed to its partnership with the Philippines.
“Obviously, there will be some hiccups, but expect things to normalize soon. Both the US and the Philippines will benefit from a stronger relationship,” Del Castillo added.
“Although we’re still very positive, as we’ve been a good ally of the United States, I believe they will reciprocate with tangible economic benefits for our country,” Secretary Frederick Go, special assistant to the president for investment and economic affairs, said in an interview with reporters on February 17.
Documents from Go’s office show the US Trade and Development Agency has committed “a technical assistance of up to $2.5 million for the early stage implementation and feasibility studies of the Subic-Clark-Manila-Batangas freight railway, the flagship of the LEC.”
On top of that Go said the United Kingdom, Sweden, Korea, and Australia have signified they are seriously committed as well to the LEC.
“In their minds, they will proceed,” said Go.
After their meeting on Nov. 22, 2024, the LEC steering committee has yet to schedule the next meeting.
In that meeting, Swedish Trade Commissioner Johan Lennefalk made it known that Swedfund, Sweden’s development finance institution, is keen on funding the feasibility study, according to a report by Malaya Business Insight on Nov. 26, 2024,
The Subic-Clark-Manila-Batangas freight rail, however, needs government support.
Like all rail projects all over the world, state support is necessary, since the private sector can only come in after the government has put in the necessary infrastructure, said Go.
“It’s rare that the private sector builds a rail from scratch,” he added.
