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Philippines aims for logistics hub status, bolstered by US ties and strategic investments

Philippines aims for logistics hub status, bolstered by US ties and strategic investments

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The Philippines is positioning itself as the next major manufacturing and logistics hub in Asia by leveraging its deepening ties with the United States.

President of the Philippines, Ferdinand Marcos Jr., outlined this vision at the 6th Indo-Pacific Business Forum in Manila on 21 May 2024, highlighting the country’s intensified defence and economic engagements with Washington.

Additionally, in April 2024, the US pledged significant support to accelerate investments in the Philippines, particularly focusing on transport infrastructure, clean energy and semiconductor supply chains through the Luzon Economic Corridor.

During the forum, President Marcos emphasised that the country’s comprehensive infrastructure programme, which features 185 priority projects worth approximately 9.5 trillion pesos (c. £133 billion).

Bloomberg reported that this extensive infrastructure development plan aims to elevate the Philippines’ competitive standing against regional neighbours like Vietnam and Indonesia, who are also vying for significant investment flows redirected from China as part of the US and allies’ de-risking efforts.

The Indo-Pacific Business Forum followed the ‘first-ever trilateral summit between the US, the Philippines and Japan at the White House, where the allies committed to growing investment partnerships. Daniel Kritenbrink, US assistant secretary of state for East Asian and Pacific Affairs, highlighted at the forum the intrinsic link between American prosperity and the Indo-Pacific region.

UPS’s expansion in the Philippines

Coinciding with the announcement of the Philippine government’s initiatives, UPS announced a significant investment in a new hub at Clark International Airport on 21 March 2024. This new hub is part of UPS’s broader $250 million (c. £190m) investment in Asia Pacific since 2023, aimed at improving transit times for imports, exports and trans-shipments. The new facility at Clark, expected to be operational by late 2026, aims to bolster UPS’s integrated express, supply chain and healthcare logistics services.

Wilfredo Ramos, president of UPS Asia Pacific, stated: “UPS’s expansion in Clark will bring positive changes to Pampanga, providing job opportunities for the local community and serving as an economic stimulus in the region.”

Strategic US-Philippines partnership

The US and the Philippines continue to strengthen their bilateral relations through various strategic initiatives. The US Trade and Development Agency has announced new activities that will leverage over $500m (c. £380m) from public and private sectors to develop high-quality infrastructure in the Philippines. These initiatives encompass renewable energy, smart grids, customs and supply chain modernisation, healthcare solutions and aviation infrastructure.

Additionally, the US International Development Finance Corporation (DFC) is mobilising private sector investment in critical sectors like infrastructure, minerals and renewable energy. The DFC’s new $20m (c. £15.2m) loan for affordable housing exemplifies its commitment, raising its total commitments in the Philippines to $80m (c. £60.8m).

President Marcos reiterated the Philippines’ dedication to participating in global value chains and attracting foreign direct investments to sustain economic growth. “An economically strong Philippines will be a valuable ally,” he asserted.


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