US backs energy projects in Philippines with eye on China
The US plans to support liquefied natural gas and nuclear projects in the Philippines to lower electricity costs and attract businesses into an investment belt that’s seen to counter China’s supply-chain influence.
The US Trade and Development Agency is working with the Philippine government and companies — including San Miguel Corp. and Manila Electric Co. — to improve power generation and transmission in the Southeast Asian nation, USTDA head Thomas Hardy said in an interview.
The goal is to address investors’ concerns about high electricity prices and woo them to support the Luzon Economic Corridor, a flagship infrastructure and investment project backed by the US and Japan on the Philippines’ main island. The US is pushing for more investments in manufacturing into its Asian ally — including in a 4,000-acre AI hub north of Manila — as its tech rivalry with China heats up.
“If it’s good for the Philippines, it’s good for all of us,” Hardy said on Thursday. The USTDA is “designed by law to open up markets for American companies. Is it countering China? Maybe, but we weren’t established to counter China.”
The USTDA official said he sees a lot of LNG projects where US companies can partner with financiers and developers in the Philippines to bring in gas into the Southeast Asian nation. “Whether that’s piping it, doing regasification or new gas-fired power projects, there’s a lot of opportunities,” Hardy said. The US is the world’s top LNG exporter, with plans to double output by 2030.
Nuclear power is also a potential avenue for US-Philippines cooperation, according to the American official. He said his agency will host a delegation of Philippine government officials and private sector leaders later this year to familiarize them with small modular reactor technology and facilitate consultations with US regulators.
The USTDA earlier announced technical assistance funding for Manila Electric’s power generation arm to evaluate small modular reactor designs. That’s part of the agency’s wider push to advance key industries in the Philippines including rail transport, aviation and shipping.
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The agency, the US government’s first mover on key infrastructure in emerging markets, also plans to help accelerate the Philippines’ critical minerals processing capability and link this to the American supply chain, according to Hardy. He also said the study on a freight railway project linking the planned investment belt will likely be finished this year.
Manila has been leveraging its stronger defense ties with Washington for economic advantages. Securing investments is crucial for President Ferdinand Marcos Jr. as the economy stumbled into a deeper slump after the Iran war fallout and a domestic corruption scandal soured consumer and business confidence.
Diversifying energy sources is also critical for the Philippines as it grapples with a fuel crunch and high power prices due to the disruption to the Strait of Hormuz. Adopting alternatives like LNG and nuclear power will help reduce the nation’s heavy reliance on oil from the Middle East.
Marcos, in a speech at the US-organized forum on the Luzon Economic Corridor on Thursday, said the ecozone is a government’s strategy for organizing growth. “We are moving from identifying possibilities to preparing projects; from expressions of interest to commercial partnerships,” he said.
During the same event, the European Union and Spain formalized their support for the economic corridor, expanding the partnership to 13 members.
The US foreign aid agency Millennium Challenge Corporation separately formalized on Thursday a $60-million grant to the Philippines to help speed up the approvals process for energy projects and improve the services of electric cooperatives. The funding marks a comeback for the American aid agency to the Philippines after it got caught in the crosshairs of Rodrigo Duterte during his presidency over human rights issues.
“We want to be able to drive decisions more quickly and more predictably for others who would want to operate in this space,” said Dan Petrie, MCC acting chief of staff, in a separate interview.
(By Andreo Calonzo)
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