Korea should eye Philippines‘ infrastructure vision: Ambassador

2024.05.07 09:55:01 | 2024.05.08 10:26:40

[Graphics edited by Song Ji-yoon and Chang Iou-chung]이미지 확대

[Graphics edited by Song Ji-yoon and Chang Iou-chung]

South Korean companies should seek opportunities in the Philippines, which has introduced a nationwide infrastructure drive, according to the Korean ambassador.

“The Philippine government is currently focusing on areas such as defense, nuclear power and infrastructure investment, which are areas where Korea excels,” said Lee Sang-hwa, Korean Ambassador to the Philippines, in Manila on Thursday.

He added that there are potential synergies between Korean firms and the Philippines, which is actively pursuing innovation under President Ferdinand Marcos Jr.’s “Bagong Pilipinas” or “New Philippines” vision.

The Philippines has faced economic challenges since the Covid-19 pandemic, including delayed recovery, inflation, and limited foreign investment. President Marcos Jr. has prioritized addressing these issues, with a particular focus on the country‘s infrastructure.

His plans aim to strengthen the manufacturing sector by improving infrastructure and energy capacity to boost the economy, taking advantage of the country’s strengths such as its large population, natural resources, and thriving industries such as tourism and business process outsourcing (BPO) services.

This vision has gained momentum both domestically and internationally.

Last year, the Marcos Jr. administration finalized plans for the Maharlika Investment Fund (MIF), a 500 billion peso ($8.74 billion) sovereign wealth fund to stimulate economic growth and job creation.

Despite concerns about corruption, if effectively implemented, these investments could significantly benefit the Philippine economy.

Recent outcomes of the U.S.-Japan-Philippines trilateral summit, the inaugural meeting of which was held last month, are expected to spur infrastructure development.

Following the summit, the Luzon Economic Corridor of the G7 Partnership for Global Infrastructure and Investment (PGI) project was launched, supporting connectivity between Subic Bay, Clark, Manila and Batangas.

Lee Sang-hwa, Korean Ambassador to the Philippines. [Photo by Han Joo-hyung]이미지 확대

Lee Sang-hwa, Korean Ambassador to the Philippines. [Photo by Han Joo-hyung]

In a meeting with Maekyung Media Group Chairman Chang Dae-whan last week, President Marcos Jr. highlighted joint investment prospects in infrastructure projects, including railways, ports, clean energy, and semiconductor supply chains, and commented on the potential increase in opportunities for Korean companies as well.

In March, U.S. Secretary of Commerce Gina Raimondo and a delegation of global corporate representatives visited the Philippines for discussions on key issues.

The delegation of 22 major companies, including United Airlines Holdings Inc., Google parent Alphabet Inc. and Black & Veatch Corp. pledged more than $1 billion in investments after the visit. The areas of potential investment were mostly advanced industries such as artificial intelligence (AI), digital technology, communications infrastructure, solar energy and electric vehicles.

Against this backdrop, the Philippines‘ potential as a strategic base for U.S. semiconductor diversification has increased. While the U.S. focuses on attracting advanced semiconductor design and manufacturing facilities to the U.S. mainland with substantial subsidies, it also aims to utilize the abundant resources and manpower of Southeast Asia, including the Philippines, for post-processing.

However, ensuring a stable power supply is critical, which is why the Marcos Jr. administration is exploring the reactivation of the Bataan Nuclear Power Plant (BNPP) and considering small modular reactors (SMRs).

The BNPP project was pursued in the 1970s by President Marcos Sr, the father of the current Philippine president, in response to the oil shock of the time, but was halted due to incidents such as the 1986 Chernobyl nuclear disaster. The project is currently at the feasibility study stage with Korea Hydro & Nuclear Power Co. If reactivation is confirmed, it is expected to become a flagship cooperative project benefiting both countries.

Despite the opportunities, challenges remain.

Kim Dong-yeop, director of the Korea Institute for ASEAN Studies, said the key to the success of the Philippines’ vision is strong leadership and policies to ensure inclusive growth beyond the Philippines‘ elite.

By Shin Chan-ok and Chang Iou-chung

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