USA, Phl counterparts to develop Luzon corridor

The government of the United States of America (USA) has begun dealing with its Philippine counterparts to help develop the Luzon corridor in a bid to improve logistics woes.

"We have discussed the Luzon corridor, which is a collaboration to develop the infrastructure connecting Subic, Clark, Manila, and Batangas. This is important because 40 percent of the country's population lives in Luzon and half of the country’s GDP (gross domestic product) is produced in Luzon," US Assistant Secretary of State for the Bureau of Economic and Business Affairs Ramin Toloui told selected members of the media on Tuesday at the US Ambassador's residence in Forbes Park, Makati City.

Manila is Toloui's fourth Asian trip, after visiting Tokyo, Japan; Ho Chi Minh City in Vietnam, and Seoul, South Korea in the past days.

He said his economic visit, which was focused mainly on deepening partnerships with Asian allies and strengthening resilience in the supply chains, was between him and Special Assistant to the President for Investment and Economic Affairs Secretary Frederick Go; Finance Secretary Ralph Recto, and Board of Investments managing head Undersecretary Perry Rodolfo.

Last 11 April, the US government announced that they will work hand in hand with Japan and the Philippines for the Partnership for Global Infrastructure and Investment (PGII) Luzon Corridor.

The PGII, founded by the G7 countries, will mobilize up to $600 billion by 2027 and also aims to help narrow the infrastructure investment gap in partner countries.

The investment initiative is deemed to "accelerate coordinated investments in high-impact infrastructure projects, including ports, rail, clean energy, semiconductors, supply chains, and other forms of connectivity in the Philippines".

"Strengthening the transport and logistics infrastructure can be an accelerator for further economic development in various sectors such as manufacturing, clean energy, and agribusiness. We want to be a partner with the Philippines to realize that vision," the US official said.

Earlier, Trade Undersecretary Mary Jean Pacheco during the Supply Chains Unlinked: Overcoming logistics obstacles in business expansion in the Philippines forum, organized by logistics firm Ninja Van Philippines, admitted that the top challenge for logistics firms was infrastructure, being the Philippines as a archipelagic country; the ease of doing business as players need to endure a voluminous registry and regulatory compliance requirements, and the lack of skills for the logistics workforce.

While globally, logistics platform Extensiv in a survey revealed that supply chain challenges in 2023 were material scarcity, increasing freight prices, difficult demand forecasting, port congestion, changing consumer attitudes, digital transformation, restructuring, and inflation.