The US government, under the Biden administration’s Indo Pacific Economic Framework (IPEF) initiative, vowed high quality investments in the Philippines’ semiconductor and nickel sectors that will boost the country’s presence in the global supply chains in battery and electronics manufacturing.
Heather Variava, US Deputy Chief of Mission to the Philippines, said in a speech at the 48th Philippine Business Conference that while negotiations for the IPEF is still ongoing, preliminary discussions showed the Philippine economy, workers, and families benefitting from a range of areas under the framework.
“In the coming months, you can expect to see some announcements of projects here in the Philippines that will directly support our bilateral engagement with the Indo Pacific economic framework,” said Variava.
The IPEF seeks to chart a path forward with partners and allies in the region to create economic opportunity, improve labor conditions and promote sustainability for all the economies. It aims to enhance US economic relations in the Indo Pacific region.
The IPEF has four pillars: trade, supply chains, clean economy, and fair economy. Launched in May this year, the US and 13 of its partners in the region including the Philippines will negotiate high standard agreements under each of these pillars.
Of the four pillars, Variava cited supply chains as an area of importance noting that the Philippines is a critical node in the global supply chain for semiconductors. Philippines is also one of the world's top producers of nickel, a critical mineral used in battery and electronics manufacturing.
Through IPEF, she said, “We aim to promote supply chain resilience and attract investments that support the industrial base for semiconductors and battery manufacturing” adding that such “high quality investments are more than money or minerals.”
“These investments create good, high paying jobs that build communities and commercial ecosystems in areas where we invest,” she pointed out.
In the fair economy pillar of the IPEF, the Philippines fiscal situation is expected to benefit from improved tax collection and transparency, ultimately directly benefiting Filipinos, workers and families.
Under this pillar, Variava said the US hopes “to work with the Philippines and other partner nations on tackling corruption, which we know will improve the investment, climate and boost flows of commerce.”
Most importantly, she said, the Philippines will benefit from the clean economy pillar on regional efforts to bolster resilience to climate change and natural disasters. “We recognize the Philippines is one of the world's most vulnerable countries to climate change. And we expect cooperation under the clean economy pillar to directly benefit efforts to promote climate resiliency,” she added.
Through engagement in the trade pillar, the US expect to reach agreements on digital standards that will pave the way for future digital economy investments in the Indo Pacific region. “This region is home to some of the largest digital economies in the world,” she said.
Agreements on digital standards would be particularly important for countries like the Philippines, which have strong intellectual property safeguards and large information technology sectors.
Inclusivity is also another facet of the framework outside of market access. Variava said that the group of countries, regardless of size in the IPEF, will have the muscle to negotiate IMF agreements while developing specific concrete projects to advance the framework’s objective of promoting inclusive and sustainable economic growth.
She added that the US also sees opportunities to continue working with the Philippines to promote sustainable and renewable energy. She cited the USAID’s $34 million Energy Secure Philippine project to support a more competitive, secure and resilient Philippine energy sector.
She said, Energy Secure Philippines will mobilize more than P41.8 billion private sector investment to support up to 500 megawatts of new clean energy generation.
Another USAID project is the $33 million allocation over the next five years to promote economic growth through better information and communications technology, which will help bridge the digital divide and the Philippines.
Also USAID is strengthening private enterprises for digital economy with a new five year $18 million project that will expand the participation of Philippine small and medium enterprises in emerging ecommerce ecosystem in the country.
Meanwhile, Variava announced that the US Embassy here in Manila is now able to significantly increase the number of non-immigrant visa interview appointments for Philippine travelers that want to visit the United States.
“Our consular section is still rebuilding in the post pandemic. But we look forward to further growth in the travel between the United States and the Philippines,” she said.