US Eyes Luzon Corridor as SE Asia Growth Model

MANILA, Philippines — Washington sees the Luzon Economic Corridor (LEC) as a potential template for developing similar growth corridors across Southeast Asia, where the United States sees room for more infrastructure and investment partnerships. But for Ambassador Heather Variava, senior adviser at the US State Department’s Bureau of Economic, Energy and Business Affairs, the Philippine corridor remains “unique” because it is centered on a single country while bringing together an expanding coalition of international partners. “I think that the Luzon Economic Corridor can serve as a model for other countries and for the region,” Variava said in a media conference following the inaugural LEC Investment Forum in Taguig. “We do corridors across multiple countries in other parts of the world, so I don’t think there’s anything to say that we couldn’t pursue similar endeavors across Southeast Asia,” she added. Spanning Subic, Clark, Manila and Batangas, the LEC is the Philippines’ flagship economic corridor, covering areas that together account for about half of the country’s economy. Launched in 2024, the LEC initiative began as a trilateral partnership among the Philippines, the United States and Japan to crowd in infrastructure and private-sector investments into the areas. It has since expanded into a 13-member partnership: Australia, Canada, Denmark, France, Italy, South Korea, Sweden and the United Kingdom joined in May, while Spain and the European Union formally joined during this week’s investment forum. Variava said replicating the LEC elsewhere would depend on bringing together three key players: the host government, the United States and the private sector. She noted that Washington already supports economic corridor initiatives in Africa and Central Asia, while US agencies are pursuing infrastructure partnerships across Southeast Asia. The US Millennium Challenge Corp. (MCC), for instance, has an ongoing compact in Indonesia focused partly on infrastructure financing and broader economic reforms. It also signed a $60-million threshold grant with the Philippines to strengthen energy sector governance. READ: PH secures $60-M MCC grant for energy sector MCC acting chief of staff Dan Petrie said improving the regulatory and operating environment was critical to attracting private investment. “The number one issue that we hear about from the private sector is that the surrounding operational and regulatory environment needs to make sense,” Petrie said. “We’re seeking to help set the table and unlock ultimately private sector-led growth.” At the forum, the US Trade and Development Agency (USTDA) also announced two new agreements to fund studies for infrastructure projects linked to the growth corridor. One will fund a feasibility study for Subic Drydock Corp. to expand its approach pier by 169 meters, allowing the Subic Bay facility to accommodate larger vessels and strengthen its ship repair capacity. INQ