US Boosts Support for Philippines’ Luzon Economic Corridor with Increased Funding for SCMB Railway Study
Manila, the Gulf Observer: The United States has reaffirmed its strong economic partnership with the Philippines by increasing grant funding for the Luzon Economic Corridor (LEC), a flagship initiative aimed at modernizing infrastructure and strengthening regional connectivity across Luzon Island.
Despite the Trump administration’s recent decision to scale back certain U.S. government financing programs in other countries, Washington has expanded its commitment to the Philippines through the U.S. Trade and Development Agency (USTDA). The agency raised its grant for the pre-feasibility study of the Subic-Clark-Manila-Batangas (SCMB) Cargo Railway project from USD 2.5 million (PHP 138.8 million) to USD 3.8 million, according to a statement by Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA) Secretary Frederick Go on Sunday.
The increased grant, conveyed to the Philippine government on April 28 following a competitive selection process for a U.S. consultancy firm, marks a significant step forward for the SCMB initiative. Final discussions and signing of the Beneficiary Agreement are expected in the coming days, involving the OSAPIEA, the Department of Transportation, and the U.S. Embassy in Manila.
“This is great positive news,” said Secretary Go. “This milestone demonstrates that the Philippines-US economic ties are stronger than ever.” He added that the funding increase signals growing international investor confidence and is anticipated to generate substantial employment along the corridor.
The SCMB freight rail project, the centerpiece of the LEC, aims to link major industrial and trade hubs across Subic Bay, Clark, Metro Manila, and Batangas. Once operational, the cargo railway is expected to streamline logistics, lower transport costs, and enhance the region’s economic competitiveness while supporting job creation.
In addition to U.S. support, the Philippines is in talks with Sweden’s development financier, Swedfund, which is considering a USD 1.2 million grant to supplement the SCMB rail study. The broader LEC initiative emerged from the trilateral summit between the Philippines, the U.S., and Japan held in April 2024, and has since attracted interest from other international partners.
Secretary Go noted that the United Kingdom, Sweden, and Australia have expressed intent to participate in the corridor’s development. Meanwhile, France’s Minister Delegate for Foreign Trade and French Nationals Abroad, Laurent Saint-Martin, conveyed France’s interest in joining the project during a recent meeting with President Ferdinand R. Marcos Jr. in Manila.
The LEC continues to gain momentum as a transformative initiative aimed at fostering inclusive growth, regional integration, and long-term infrastructure development in the Philippines.
