Big railway, ports projects: What to know about the Luzon Economic Corridor

MANILA, Philippines — The Philippines has received confirmation that the United States' support for the Biden-approved Luzon Economic Corridor remains intact despite US President Donald Trump's recent pullbacks in foreign assistance.

Frederick Go, special assistant to the president for investment and economic affairs, confirmed over the weekend that the US Trade and Development Agency has increased its funding for the Subic-Clark-Manila-Batangas Railway, the flagship project of the Luzon Economic Corridor, from $2.5 million to $3.8 million. 

Go called the continued US support for the project a "milestone that demonstrates that Philippines-US economic ties are stronger than ever." 

The Luzon Economic Corridor — launched in 2024 following a historic trilateral summit of the Philippines, US and Japan — is a flagship infrastructure initiative designed to link Subic, Clark, Manila, and Batangas to accelerate trade and investment across Luzon.

It is the first such initiative in the Indo-Pacific under the G7-backed and US-initiated Partnership for Global Infrastructure and Investment — a program intended to offer alternative development financing to countries outside China’s Belt and Road Initiative.

But what exactly is this corridor, and why is it important to the Philippines?

Luzon corridor as an initiative for investments

Essentially, the Luzon Economic Corridor is an infrastructure and logistics plan aimed at improving the movement of goods and people across the most industrialized parts of the country. 

The Philippine Economic Zone Authority said the Luzon corridor aims to support connectivity among Subic Bay, Clark, Manila and Batangas and facilitate investments within each hub in high-impact infrastructure projects. This includes rail, port modernization, agribusiness, and clean energy and semiconductor supply chains and deployments. 

The corridor's flagship project is the Subic-Clark-Manila-Batangas Railway, a 250-kilometer freight line intended to connect Subic Port, Clark International Airport, the Port of Manila and the Port of Batangas. 

The project aims to ease port congestion, lower transportation costs and improve the efficiency of cargo movement across Luzon’s key logistics and industrial zones.

Why the flagship railway project matters. Go said at a press briefing on Monday, May 5, that this rail line is "extremely important" to the country's trade and development, given that it connects the "most important" ports.

"The Subic Port, the Manila Port and the Batangas Port together comprise over 80% of all volume of port traffic in our country," the economic czar said.

Last year, then-Trade Secretary Alfredo Pascual confirmed that the project design was on track for completion by 2026, with construction set to begin in 2027. 

“It will connect major ports, industrial parks, special economic zones and education and employment centers in the former US bases, the capital city and a port province south of Manila,” Pascual said at a roadshow in June 2024.

International support for the corridor

While initially conceived as a trilateral project between the Philippines, United States and Japan, the corridor has attracted growing international interest. The United Kingdom, Sweden, Australia, South Korea and France have all signified their intent to participate in developing the corridor.  

Sweden's development finance institution, Swedfund, is considering a separate grant of $1.2 million for the project.

In August 2024, the National Economic and Development Authority and the Department of Transportation proposed 21 projects for inclusion in the corridor, with the combined cost of 12 of these projects estimated at P2.1 trillion.