Philippines wants U.S. and Japan to take over infrastructure projects

The Philippines is exploring support from the U.S. and Japan for a significant freight railway project after discontinuing financing discussions with China. The 50 billion peso ($868 million) Subic-Clark railway, set to connect former U.S. military bases now repurposed as commercial centers, is envisioned as a component of the Luzon Economic Corridor. This initiative, conceived during a recent trilateral summit at the White House, aims to showcase economic cooperation among the U.S., Japan, and the Philippines.

Delfin Lorenzana, chair of the Bases Conversion and Development Authority (BCDA), expressed optimism that the U.S. and Japan would invest in the project. The Philippines decided last year to cease pursuing Chinese loans for this and two other infrastructure projects due to stalled negotiations, a move coinciding with deteriorating relations between the two nations over the South China Sea territorial disputes.

During the April 11 summit, leaders from the U.S., Japan, and the Philippines launched the Luzon Economic Corridor, with plans for a promotional event at the U.S.-led Indo-Pacific Business Forum in Manila. The Philippines anticipates attracting approximately $100 billion in investments over the next decade as a result of these efforts. The Subic-Clark railway is expected to enhance connectivity across Luzon, bolstering investments in rail, ports, clean energy, semiconductor supply chains, and agribusiness.

Lorenzana, a former defense secretary, indicated a preference for U.S. and Japanese involvement but mentioned South Korea or other allied nations as potential partners. Additionally, the BCDA is considering seeking funds from the World Bank and the Asian Development Bank. Key projects under the Luzon Economic Corridor include a second runway for Clark International Airport and a substantial food terminal hub, positioning Subic and Clark as strategic locations for industries ranging from logistics to manufacturing.