Ambassador Heather Variava, Senior Advisor, Bureau of Economic, Energy, and Business Affairs, U.S. Department of State

Thomas R. Hardy, Deputy Director and Chief Operating Officer, U.S. Trade and Development Agency

Dan Petrie, Acting Chief of Staff, Millennium Challenge Corporation

Asia Pacific Media Hub

MODERATOR:  Good afternoon from the U.S. Department of State’s Asia-Pacific Media Hub.  I’m Tim Johnson, and it’s my pleasure to welcome journalists to this on-the-record briefing.  Today, we’re honored to host three speakers: Ambassador Heather Variava, Senior Advisor in the Bureau of Economic, Energy, and Business Affairs at the U.S. Department of State; Thomas Hardy, Deputy Director and Chief Operating Officer of the U.S. Trade and Development Agency, performing the duties of the Director; and Dan Petrie, Acting Chief of Staff of the Millennium Challenge Corporation.  Our speakers join us today from the Luzon Economic Corridor Investment Forum in Manila.

With that, let’s get started.  Ambassador Variava, I’ll turn it over to you for your opening remarks.

AMBASSADOR VARIAVA:  Thank you so much, and good afternoon, everyone, from Manila.  We’re here at a very bustling and busy Luzon Economic Corridor Investment Forum.  The Luzon Economic Corridor is a partnership that accelerates coordinated investment to create mutual prosperity, build resilient supply chains, and advance a more connected, competitive, and prosperous Luzon and Philippines and beyond.

The Luzon Economic Corridor connects Subic, Clark, Manila, and Batangas, not as four separate projects, but as anchors of one connected economy.  And the goal of the partners of the Luzon Economic Corridor, which include the United States, Philippines, and Japan, is to make it easier to move goods, energy, data, people, and ideas across Luzon, and then from Luzon to the world.  We’re crowding in infrastructure and investment to create an economic corridor that is more than the sum of its parts.  And today, at the Investment Forum, we’re about one thing above all: mobilizing private sector investment as the true engine of the Luzon Economic Corridor.

We’re bringing together investors, developers, and industry leaders to accelerate opportunities across transport and logistics, energy, digital infrastructure, and advanced manufacturing.

The United States is delighted to be here with a robust delegation to reflect our deep commitment to the Luzon Economic Corridor.  I’m from the State Department, which is leading and coordinating U.S. government efforts to advance the Luzon Economic Corridor.  I’m delighted to have my colleagues here with me from the U.S. Trade and Development Agency, which is sponsoring the forum and stands ready to support project preparation for private partners developing infrastructure throughout the corridor; we have the Development Finance Corporation, the Export-Import Bank of the United States, among others, who are here to provide project financing.  And earlier today – and Dan will tell us more – the Millennium Challenge Corporation signed a new threshold program focused on the energy sector.

We’re very delighted to work with Philippine and Japanese colleagues for their – and we thank them for their steadfast partnership in this endeavor.  We had two more countries join.  We have – previously, we had Australia, Canada, Denmark, France, Italy, Korea, Sweden, and the United Kingdom join the Luzon Economic Corridor back in May.  Today, the European Union, Spain joined us.  And together, we – our nations are and our private sectors are planting the seeds of a public-private partnership that will grow into investments that will drive economic growth in the Luzon Economic Corridor and bring benefits to all of our nations for years to come.

So thank you very much, and I’ll turn to my colleagues.

MR HARDY:  Thank you.  Tom Hardy, Deputy Director and Chief Operating Officer of the U.S. Trade and Development Agency.

It’s a great pleasure for the U.S. Trade and Development Agency to sponsor the Luzon Economic Corridor Investment Forum here this week in Manila.  The forum brings together industry and government leaders to help turn priority infrastructure projects in the Luzon Economic Corridor into a reality.  That is what this forum is all about, and it’s a reflection of what USTDA is all about.

USTDA is both the convener of this forum, but as importantly, USTDA is the U.S. government’s first mover on infrastructure development in emerging markets around the world.  For more than three decades, we have partnered with the Philippines to prepare infrastructure projects and connect Philippine infrastructure priorities with expertise, technologies, and financing options that American companies have to offer.

Today, USTDA announced new activities to support the expansion of port facilities at Subic Bay and the establishment of a nationwide network for public Wi-Fi access points.  These activities represent very different sectors, but they share a common purpose: attracting investment into high-quality infrastructure projects while creating opportunities for trusted partners and technologies to contribute to Philippines’ growth.

The success of this forum will not ultimately be measured by the conversations we had here today.  It will be measured by what happens next – the partnerships that continue after we leave Manila, the projects that move forward, and the investments that bring new opportunities to communities across the Philippines.  In fact, tomorrow, after this conference ends here in Manila, we’ll be taking three different groups of participants in this conference to the sites at Subic, Batangas, and Clark to introduce them to the leaders of the development that’s taking place on the ground here in the Luzon Economic Corridor.

USTDA is proud to be part of that effort, and we look forward to continuing to work with all of you.  Thank you.

MR PETRIE:  Good afternoon, this is Dan Petrie, Acting Chief of Staff with the Millennium Challenge Corporation. We are proud to be here at the Luzon Economic Corridor Investor Forum, and proud to partner with the government of the Philippines on a $60 million Energy Threshold Program, signed just hours ago, which is designed to unlock growth through investments and modernize the  country’s energy sector.  This builds upon a whole-of-government approach and fills critical gaps that will enable energy sector investment, strengthen institutions, and expand opportunities for commercial engagement.

MCC has a long history with the Philippines.  We’ve worked previously to strengthen tax administration.  We’ve also built more than 200 kilometers of roads that connected communities to commerce and helped provide a lifeline during typhoon season.

MCC and the government of the Philippines designed this program together to reduce high electricity costs and improve reliability by addressing governance and regulatory bottlenecks in the energy sector.  These are going to remove barriers to investment and improve the reliability, resilience, and long-term financial viability of the country’s power system.

Specifically, we’re going to be seeking to modernize the Energy Regulatory Commission through process reforms, digitalization, strengthening governance and operational efficiency of electric cooperatives, and we’re going to pilot smart grid technologies.  The program will also look to unlock domestic capital for infrastructure investments, supporting the long-term durability of resilient and affordable power.

So, by modernizing the ERC and strengthening the commercial viability, we are creating clearer, faster, and more predictable pathways for U.S. companies and others to deploy grid modernization technologies, renewable energy systems, and digital infrastructure.

MCC has a unique approach.  We build large infrastructure and advance policy and institutional reforms.  In short, we are laying a strong foundation upon which everyone – investors, government leaders, development partners, communities – can build.

So, thank you.  We’re delighted to be here, and we look forward to your questions.

MODERATOR:  Thank you very much.  We’ll now turn to the Q&A portion of today’s briefing.  Our first question goes to Karen Lema from Reuters, if you could please unmute yourself and go ahead.

QUESTION:  Hi.  Hi, good afternoon.  Thank you for this forum, but I think some of the questions that I sent earlier have been overtaken by the events.  (Laughter.)  But really, I – we – I would like to understand, because I think it’s really only now that we’re putting a lot of concrete announcements since the Luzon Corridor was announced.  So I wanted to understand, what do you ultimately envision the Luzon Economic Corridor becoming over the next few years?

AMBASSADOR VARIAVA:  Sure, hi.  So the Luzon Corridor actually includes a space that already accounts for 50 percent of the Philippines’ GDP, but we – and so it’s really kind of the heart of the economy of the Philippines.  We see a lot of American and other companies thriving here, and we believe there’s scope for more, and we’ve focused on building the infrastructure that can support those companies.  We’re looking in several areas in particular: transport and logistics, energy, and then digital infrastructure and advanced manufacturing, so supporting investments in those areas, supporting private sector investments in those areas in particular.

We also have a component of regulatory reform, where we work with private companies to understand what the barriers are to investment, and then work with our Philippine colleagues to address those barriers so that we can build on the vibrant economy we see here, and make Luzon more connected, more competitive, and more prosperous.

MODERATOR:  Alright, thank you.  Our next question goes to Allen Limos of The Manila Times.  Please unmute yourself and go ahead.

QUESTION:  Hello, am I audible?  Okay.  So my question really stems from the rampant issues right now being raised by locals from one of the initiatives that will be pushed forward in this Luzon Economic Corridor, which is the Pax Silica initiative.  A lot of people have – especially for locals in the New Clark City – are hesitant towards this initiative because they’re worried that they will be displaced.  Now, how – on the side of the U.S., what are the – what are the plans that we’re taking to ensure that Filipinos will not be left behind, and that these issues of displacement will be addressed?  Thank you.

AMBASSADOR VARIAVA:  Thank you for your question.  So I would emphasize that today we’re talking about the Luzon Economic Corridor, which is an initiative that is separate from Pax Silica, although they are indeed connected.  I would note that whether we’re talking about the Luzon Economic Corridor or Pax Silica or other initiatives, the United States always works with its partners – in this case the Philippines – in a way that brings benefits to both sides, but mutual benefits.  We work within the parameters of our legal structures, so any agreements that we come to meet the legal requirements of both – in this case, both the United States and the Philippines.

Any investments or activities we undertake are designed to be additive, meaning we will add more power, we want to add more water, we want to add more infrastructure so that we can have these investments and that the people of the Philippines can benefit, whether it’s through jobs, whether it’s through a more vibrant economy.

Among the projects we have in the Luzon Economic Corridor related to, say, cold storage, which brings food to markets in a safer, more sustainable way; on the digital infrastructure side, developing infrastructure that is safe and secure and trusted so that our information is protected.  These are some of the ways in which we work together in partnership with the Philippines to bring benefits to both Americans and Filipinos.

MODERATOR:  Thank you.  Our next question goes to Sam Beltran of the South China Morning Post, if you could please unmute yourself and go ahead.

QUESTION:  Hi, good afternoon.  I have a few questions for you.  So first is, what aspects are investors focusing on or excited about when it comes to the Luzon Economic Corridor?  Meaning to say, what are the locations or opportunities that present the most potential?

And my second question is, with two years left in the Marcos administration, have there been any talks with your Filipino counterparts about ensuring that the corridor and those investments remain resilient even after the presidential election in 2028?  And what is your confidence level here?

That’s it.  Thank you.

AMBASSADOR VARIAVA:  Thank you.  I don’t know if either of my colleagues want to talk about things they’re excited about or, as I said, we have a lot of activities that we’re working on in the space of transport and logistics, in the space of energy and power, digital infrastructure.  One of the deals that paved the road to the Luzon Economic Corridor was the deal with Cerberus, and taking over the shipyard up at Subic Bay.  The Hyundai shipyard has just launched its first ship from that – from that shipyard.  In the case of energy and power, we’re looking at how can we improve energy generation, how can we improve the grid.  When it comes to digital infrastructure, in fact, I think today USTDA is looking at strengthening Wi-Fi availability.

So there is really a huge range.  One of the signature efforts of the corridor is developing a freight rail system.  So we have a lot of projects that are underway in different sectors that will bring value to the Philippines and beyond.

MR HARDY:  And Tom Hardy, USTDA.  I think from our, USTDA’s, perspective, we’ve been working in the Philippines for over three decades.  The investments we’ve made are making tangible changes to economic growth here.  Currently, we’re in the final stages of concluding the final report for the development of a nickel/cobalt processing facility that’s going to be upgrading the capacity of Philippines to process critical minerals.  Likewise, as the ambassador noted, USTDA has financed the feasibility study for the Subic-Clark-Batangas-Manila Railway, which is in the final stages of being completed before being submitted to the Department of Transportation.  These are designed to have tangible impacts on both economic growth for the country, but also job creation here in the country, and doing it in a way that more closely ties the United States and the Philippines together.

On a going-forward basis, today we signed an agreement at Subic Drydock to extend the berth and drydock capacity for ship repairs, and also just yesterday signed an agreement with NNIC at the NAIA airport to increase their security modernization program, to ensure greater security capacity of transporting goods and services, or goods and people, through the NAIA airport.

AMBASSADOR VARIAVA:  I would say, in reference to the second question about sort of longevity and lasting, we’re very delighted to be celebrating 80 years of bilateral relations between the United States and Philippines this year.  Some U.S. companies present here in the Philippines have been here for more than 100 years.  It’s a very longstanding relationship.  The deal I mentioned before up in Subic Bay, that started under President Rodrigo Duterte, was continued under President Marcos.  The initiative of the Luzon Corridor in the United States started previously, has been embraced by President Trump and his administration.

So I think we do see longevity running through – running through both the corridor initiative and many of our investments here in the United States – excuse me, here in the Philippines.

MODERATOR:  Thanks.  Our next question goes to Emerson Lim of the Taiwan Central News Agency, if you could please unmute yourself and go ahead.  Mr. Lim, if you could go ahead and pose your question.  Alright, I think we may be having tech issues with Emerson Lim.  We can come back to him.

Why don’t we go next to Cindy Frishanti Octavia of ANTARA in Indonesia, if you could unmute yourself and go ahead.

QUESTION:  Hello, good afternoon.

MODERATOR:  Yes, please go ahead.

QUESTION:  I have two questions.  I have two questions.  My first – my first question is:  How might a bilateral or trilateral corridor, like the Luzon Economic Corridor, affect ASEAN’s collective approach to attracting Indo-Pacific infrastructure investment?

And my second question is:  What lessons could Indonesia investment promotion agencies draw from Luzon Economic Corridor’s public-private partnership?

Thank you.

AMBASSADOR VARIAVA:  Thank you.  Well, I think that the Luzon Economic Corridor can serve as a model for other countries and for the region.  We have a variety of corridors that the United States supports around the world, including in Africa and Central Asia, as well as here in the Philippines.  Actually, the one here in the Philippines is a little unique because it’s only in the Philippines.  We do corridors across multiple countries in other parts of the world, so I don’t think there’s anything to say that we couldn’t pursue similar endeavors across Southeast Asia.

As someone who’s served as a U.S. diplomat in Southeast Asia for most of my career, I know there are many opportunities across the countries you mentioned, including Indonesia, and I know that my colleagues here at MCC and USTDA are active in other parts of Southeast Asia as well.  So we do see a lot of opportunities.  It’s very much of a partnership between governments of that country, the United States, and then the private sector.  So getting those three pillars together is what is the key to success, and we’re always open to talking about new opportunities for more commercial deals.

MR PETRIE:  Yeah, this is Dan Petrie with the Millennium Challenge Corporation.  We have a growing presence in the region.  We do have a program compact underway in Indonesia that is also focused on infrastructure and helping them finance their own infrastructure.  MCC works to address systemic constraints to economic growth.

The number one issue that we hear about from the private sector is that the surrounding operational and regulatory environment needs to make sense.  And so beyond kind of individual transactions and deals, which are essential and many have been announced today and in the surrounding weeks, MCC is really trying to help set that foundation for additional investment to occur.  So here in the Philippines, that’s all in the energy sector.  There’s comparable work being done in Indonesia and beyond throughout the Indo-Pacific.

And so that’s really MCC’s value proposition.  We’re seeking to help set the table and unlock ultimately private sector-led growth that my colleagues here and at other agencies within the U.S. government can follow on with additional investment.

MR HARDY:  And I would add, from USTDA, the agency has a long history of working in Indonesia in the energy space, in the digital infrastructure space, and critical minerals in particular currently.  I think that at the end of the day, it’s a robust government engagement, but it’s also an active private sector, vibrant private sector that draws American companies to want to do more work in countries across the Indo-Pacific and Southeast Asia.  We have long appreciated the partnership we’ve had with both the government and private sector in Indonesia.

MODERATOR:  Thank you. Going back to Emerson Lim of the Taiwan Central News Agency, we have a written question:  “Taiwan has expressed interest in participating in the Luzon Economic Corridor.  Has the United States discussed Taiwan’s potential participation with its partners, and what role could Taiwanese companies play in areas such as semiconductors, advanced manufacturing, and AI?”

AMBASSADOR VARIAVA:  Well, given the leading role that Taiwan plays in those sectors, I think there’s huge scope of opportunity.  We do have some Taiwanese companies present here today at the forum, and I think our Philippine friends would welcome increased and additional interest in Taiwanese investment in the Philippines, and in fact, their very vibrant connectivity between the Taiwan and the Philippines given the number of Filipinos who work in Taiwan.  So I think there’s huge scope for further collaboration and including Taiwan in the initiative.

MODERATOR:  Thank you.  Our next question goes to Sopheng In of Kampuchea Thmey Daily in Cambodia, if you could please unmute yourself and go ahead.

QUESTION:  Thank you.  I have two questions for that.  One – sorry.  Again.  You hear me, right?

AMBASSADOR VARIAVA:  Yes, we can hear you.  Thank you.

MODERATOR:  Yes.

QUESTION:  As Japan and the Philippines works to mobilize private investments through the Luzon Economic Corridor, how does the United States see Cambodia and other ASEAN economies fitting into the – its broader strategies to diversify supply chains and attract high-quality infrastructure investment across Southeast Asia?

Another question is that, beyond the Luzon Economic Corridor, is the United States considering opportunity to support greater connectivity between economic corridor across ASEAN, including Cambodia, Laos, Vietnam?  And what roles could the U.S. agencies such as USTDA and MCC play in financing or developing such a project?  Thank you.

AMBASSADOR VARIAVA:  Well, maybe I’ll start, and Dan, if you have anything you’d like to add.  The United States has a very strong and deep relationship commercially with the countries of Southeast Asia.  We – our companies are among the largest investors in Southeast Asia.  I think, alone, U.S. companies account for a huge proportion of investment in Southeast Asia, and so we’re always looking for investment opportunities.  President Trump has put commercial and economic diplomacy at the heart of his foreign policy, so he’s very keen to do more deals to invest and work with the private sector in Southeast Asia and beyond.

I think, as Dan mentioned earlier, creating that enabling environment is critical, and creating an environment where companies feel confident to invest, feel that there’s going to be consistency and predictability in the rules of investment and doing business in countries is key to attracting more investment.  And I think we’re eager to do more business in Southeast Asia and welcome the interest of the  private sector in Southeast Asia, as well as Southeast Asian governments.

I don’t know if, gentlemen, you want to add?

MR HARDY:  Yeah.  Tom Hardy, USTDA.  Most of USTDA’s work is bilateral at the country level.  The one area that I think there is a much more multilateral approach that we have taken is in the digital infrastructure space, where we look at undersea fiber-optic cable in particular, where we’re connecting countries from landing point to landing point, but in a way that is also connecting countries along the main line.  And I think that across the Indo-Pacific, including in the Pacific Island region, TDA has taken a very active approach in the undersea fiber-optic cable space to create greater connectivity within countries within the ASEAN region and within the broader Indo-Pacific region – all the way from India all the way to the United States – to create greater digital connectivity, with trusted vendors, trusted partners, both from U.S. companies as well as our partners and vendors from Europe and Japan and Korea.

MODERATOR:  Thank you.  We have time for —

MR PETRIE:  MCC has a —

MODERATOR:  Oh, go ahead.  Sorry.

MR PETRIE:  Yeah, I was just going to say MCC has a growing presence in the region.  We – with the signing here in the Philippines, we’re adding to a portfolio across the Indo-Pacific in Indonesia, Kiribati, Nepal, Solomon Islands, Tonga, Fiji, and beyond.  MCC is, by statute, quite selective in the countries that it partners with.  We’re not currently working in Cambodia or Vietnam, but our board of directors, chaired by the Secretary of State, does get together and consistently reviews the countries that we are working with and assessing what the opportunities are, and MCC engages widely to understand with potential partners on what those opportunities could be.  So we look forward to more of those conversations in the region to come.

AMBASSADOR VARIAVA:  And if I could just add one more thought, we are looking forward to the 50th anniversary next year of the U.S.-ASEAN relationship, and highlighting ways, finding ways to highlight the partnership the United States has with ASEAN.  And further to Tom’s comments, the United States strongly supports the ASEAN Digital Economy Framework Agreement, also providing support to the ASEAN Power Grid initiative.  So these are some of the ways in which we’re working across Southeast Asia in support of the economic priorities of all of our nations.

MODERATOR:  Thank you.  We have time for one more question, and it will go to Raissa Robles of South China Morning Post, if you could please unmute yourself and go ahead.

QUESTION:  I want to know – because one of the things that you’re doing is an energy-secure Philippines.  Can you hear me?  Sorry, it says —

MODERATOR:  Yes.

QUESTION:  Okay.  Energy-secure Philippines.  And you know very well that the Philippines is so insecure right now in terms of energy.  So what exactly – I mean, are there specific projects that you’re helping out so that, for instance, the Philippines could go – could try nuclear?  I’m not talking about huge power plants, but those mini power plants that seem to be introduced.

Second, are there Israeli companies that have joined to take part in the Luzon Economic Corridor?  I’d like to know that too.

And third, I’m still trying to grasp the idea of the Luzon Economic Corridor, and it seems that you have very specific projects in mind, but it spans across so many things.  For instance, you’re helping Subic-Clark fuel pipeline; you’re helping also in the Sangley – no, no, the Subic – helping it develop more.  Are you also going into weapons manufacturing, so much so that the higher kind of weapons, so that we can have that technology transfer between the armed forces and the U.S.?

AMBASSADOR VARIAVA:  Well, so, as I mentioned before, the Luzon Economic Corridor initiative is focused in three general infrastructure areas: transport and logistics, energy, and then digital infrastructure and advanced manufacturing.  So we’re seeking to create the infrastructure that – on which companies can operate and grow.  We’re doing a lot in the energy space, including exploring opportunities in nuclear energy.  We’re supporting advanced manufacturing.  The Philippines has a very good story to tell in its ability to add value to high technology, high-technology manufacturing, whether it’s semiconductors, whether it’s in the automobile industry, in the aircraft/airplane/aerospace industry.

So we see a lot of opportunities, and we’re hoping to create the conditions to support them going forward.

MR HARDY:  Yeah, I’ll just add, on the energy space, like, this forum has been a great opportunity to meet with Philippine project developers on new energy development, power generation, but also transmission and distribution.  And from USTDA’s perspective, we see a tremendous opportunity in small modular reactors here in the Philippines.  USTDA has investments already into small modular reactors, working with Morocco, helping them think about what are the technology options that will provide them power generation, and attach perhaps steam for process heat.

We’re bringing together a delegation of public and private sector entities to the United States later this year to introduce them to American technologies, but as importantly, bring them to the world-class facilities the United States Government has at the National Labs of both Idaho and Tennessee, and let them see the deep investment the U.S. government is making in civil nuclear development to support broad-based economic growth through baseload power for nuclear energy.  And I think that the investment that USTDA and the rest of the U.S. government is making in small modular reactors, as well as traditional reactors, will be transformative for our partners, both here in the Philippines but around the globe.

MODERATOR:  Alright, thank you.  That brings us to the end of today’s briefing.  If our speakers have any closing comments, I’ll turn it back to you.

AMBASSADOR VARIAVA:  I’d just like to thank you all very much for your attention today.  We’re really excited about the activities and successes we can see in the Luzon Economic Corridor and welcome the opportunity to talk about continued progress as we move forward.

MR HARDY:  Share that same sentiment.  It’s been a tremendous two days here talking about opportunities for closer economic and commercial cooperation between the Philippines and all of our Luzon Economic Corridor partners, to really transform the economic growth trajectory of the Philippines.

MR PETRIE:  Echo my colleagues’ sentiments.  MCC has a longstanding relationship with the government of the Philippines, where we have delivered meaningful results, and we look forward with the signing of this $60 million Energy Threshold Program today to continue to deliver for opportunities for mutual prosperity for both Filipinos as well as for the U.S. and beyond.  So this forum has been wonderful.  I’m really grateful to my USTDA and State Department colleagues for helping convene such an important conversation.

MODERATOR:  Alright, thank you all so much for joining us.  We’ll provide the audio recording of today’s briefing shortly via email to participating journalists, and the transcript will be available in the coming hours.  If you have any feedback or further questions, please feel free to contact us at AsiaPacMedia@state.gov.  Thanks again for your participation, and we hope you can join us for another briefing soon.  Take care.

# # #