In a recent forum at the University of the Philippines (UP) Diliman, an economist, a biologist, a political scientist and a physicist questioned whether the proposed US-led Pax Silica hub would bring meaningful industrial development to the Philippines, or leave it bearing the environmental and economic costs of another foreign-led venture.
Before the Philippines builds an industrial hub for the age of artificial intelligence, it must answer a considerably older question: Where will the water and energy come from?
Semiconductor manufacturing is resource-intensive. Producing microchips requires substantial quantities of highly purified water for cleaning and processing silicon wafers, while fabrication equipment, temperature-controlled facilities and cooling systems demand a continuous electricity supply.
Given the industrial hub’s projected requirements, can Central Luzon’s water sources and energy infrastructure support its operations without competing with the needs of surrounding agricultural communities and households, particularly during the dry season?
The project promises to move the Philippines beyond its traditional role in electronics assembly and into higher-value manufacturing. Government officials envision investments worth tens of billions of dollars, thousands of skilled jobs, and a stronger position in global technology supply chains.
But the four speakers at the UP forum “Pax Silica: Progress for Whom?” held last Oct. 19, who examined the proposed industrial development in New Clark City, Tarlac, questioned what the Philippines would actually gain, and what it might surrender in the process.
Their concerns extended from water and electricity requirements to Indigenous peoples’ rights, domestic industrial capacity, and the Philippines’ position in the growing strategic rivalry between the United States and China.
The forum, organized by the UP Diliman College of Science’s Science and Society Program, brought together economist Cielo Magno, biologist Jelaine Gan, political scientist Herman Kraft, and physicist Giovanni Tapang.
Their discussions raised a larger question: Can the Philippines become a serious participant in tomorrow’s technology industries without repeating the economic arrangements that have long kept much of its manufacturing dependent on foreign companies?
Still on paper
Pax Silica is a US-led initiative launched in December 2025 to strengthen supply chains for AI, semiconductors, critical minerals and other strategic technologies.
The Philippines joined the initiative last April 16, when Washington and Manila also announced plans for a roughly 1,620-hectare (4,000-acre) industrial hub in the Luzon Economic Corridor.
As of last June the Philippines has been among the 24 signatories to the Pax Silica Declaration, alongside the United States and partners Japan, South Korea, Singapore, Australia, India, Israel, the United Kingdom and the Netherlands. The expanded coalition includes Argentina, Chile, Costa Rica, El Salvador, Finland, Germany, Greece, Kazakhstan, Norway, Panama, Qatar, Sweden, the United Arab Emirates and the European Union.
Together, they seek to diversify the supply chains supporting advanced semiconductors, critical minerals, AI and related technologies.
The US State Department described the planned development as a facility supporting advanced manufacturing and supply chains important to American economic security.
The Bases Conversion and Development Authority (BCDA), which administers New Clark City, has projected between $40 billion and $70 billion in potential investments, and from 130,000 to 190,000 direct jobs once the hub is fully developed.
BCDA President Joshua Bingcang has presented the project as an opportunity to retain Filipino engineers, researchers and other highly skilled professionals who might otherwise seek employment abroad.
But those figures remain projections rather than investments already committed or jobs already created. Malacañang said the legal framework governing the proposed development had been submitted for presidential consideration as of Oct. 13, while the Philippines and its US counterpart continued discussing the partnership agreement. Signing was expected before yearend.
The distinction matters. The Philippines has joined Pax Silica, but the development’s detailed contractual arrangements, specific facilities and implementation plans remain separate questions.
Investment is not industrialization
For Cielo Magno, who teaches at the UP School of Economics, securing foreign investment is only the beginning of industrial policy.
She argued that the Philippines has spent decades attracting foreign businesses without consistently developing the domestic industries necessary to sustain economic growth.
Industrialization, she explained, requires more than offering land, tax incentives and comparatively inexpensive labor. It requires investments in education, research, reliable electricity, transportation, technology, and institutions capable of enforcing regulations.
These are responsibilities that businesses cannot be expected to undertake on their own, particularly when the benefits extend to the broader economy, she said.
“What we want is for foreign investment to be beneficial for us,” Magno said. That requires a clear industrial-policy strategy, she said, in which incentives are tied to measurable contributions such as productive employment, technological upgrading and stronger domestic industries.
Magno also questioned the Philippines’ enforcement record in mining and environmental regulation. She cited experiences in communities affected by mineral extraction, arguing that strong laws are of little value when implementation is weak.
The same concerns could follow Pax Silica if resource extraction expands without sufficient safeguards or domestic economic linkages. Magno contrasted the Philippines’ industrial experience with countries that deliberately invested in the capabilities of their own workers and businesses while attracting high-technology manufacturers.
The argument was not that foreign investment should be rejected, but that the government should determine what industries the Philippines intends to develop, and how outside investment would help accomplish that objective. Without that direction, the country risks remaining a production site for industries whose most valuable technologies and decisions remain elsewhere.
Environmental resources
Jelaine Gan of the UP Institute of Biology approached the matter from another direction: the environmental resources needed for operations.
According to BCDA figures, the proposed hub could require between 65 million and 90 million liters of water daily. The upper estimate is equivalent to approximately 36 Olympic-size swimming pools every day.
Gan questioned whether the water supply could be sustained, particularly during Central Luzon’s dry season, when agricultural and household demand would continue. BCDA has said it intends to rely on surface-water harvesting, storage, treatment and recycling rather than withdrawing groundwater intended for surrounding communities.
Bingcang said the proposed water system could initially supply 120 million liters daily, with the possibility of expansion. He has also discussed desalination as an option.
Gan nevertheless emphasized the need for a publicly available hydrological assessment demonstrating how the projected demand would be met without compromising other users.
Water was only one part of her presentation. She also examined BCDA’s preliminary estimate that the fully developed project might require as much as three gigawatts of electrical power. Such a requirement would be substantial. It would raise questions about new generating facilities, their location, the mix of renewable and fossil-fuel energy, and the additional land necessary to support them.
BCDA said the development would rely on dedicated generating facilities rather than drawing its entire requirement from the existing grid. Officials have also clarified that the New Clark City site is intended primarily for semiconductor and advanced manufacturing operations, not a large complex of hyperscale data centers. That distinction affects the eventual resource requirements, which cannot be considered settled without knowing what facilities will actually be constructed.
Gan warned that the environmental footprint could extend beyond Tarlac. If factories depend on minerals extracted from Caraga, Zambales, Palawan, or other parts of the country, mining operations, processing facilities, transport networks and waste-disposal systems would form part of the wider environmental calculation.
There is also a regulatory gap. During an August congressional hearing, the Department of Environment and Natural Resources said it had not received or processed a project-specific environmental impact assessment for Pax Silica because a sufficiently detailed project description had not been submitted.
An existing environmental compliance certificate covers New Clark City’s broader development plan, but that is not the same as an assessment of every future industrial facility.
Whose land, whose development?
The environmental debate intersects with another unresolved issue: the status of communities living on or claiming land near the proposed site. The concerns are concentrated in and around New Clark City in Capas, Tarlac, particularly Sitio Sapang Kawayan, an Aeta community near the proposed hub.
In September, BCDA, working with the National Commission on Indigenous Peoples (NCIP), began updating the community census there in preparation for the proposed Clark Advanced Manufacturing Park, the industrial development associated with the broader Pax Silica initiative. The exercise seeks to identify residents and families who may require assistance or safeguards.
Aeta representatives have raised concerns over ancestral land claims, displacement and livelihoods, while BCDA maintains that the designated project site falls outside legally recognized ancestral domains. The precise extent of any overlap remains disputed, underscoring the need for completed surveys, consultation and verification of ancestral land claims before development proceeds.
Under the Indigenous Peoples’ Rights Act, government agencies must comply with certification and consultation requirements when proposed activities may overlap with ancestral domains. The law also protects the principle of free, prior and informed consent, subject to its applicable conditions.
For Magno and Gan, these concerns demonstrate why environmental assessments and community participation cannot be treated simply as obstacles to investment. They are part of determining whether development produces benefits without imposing disproportionate costs on those least able to influence its design.
Factories without Filipino technology?
Giovanni Tapang of the UP National Institute of Physics questioned what manufacturing success should mean for the Philippines. The country has participated in global electronics production for decades, he noted, yet that participation has not automatically resulted in a comprehensive, domestically controlled semiconductor industry.
Factories can employ Filipino workers while importing essential machinery, following production decisions made abroad and manufacturing goods largely intended for overseas markets. Tapang argued that hosting additional foreign manufacturers would not by itself change this arrangement.
He cited Taiwan and South Korea, whose development strategies included substantial investments in research institutions, engineering capabilities and technology acquisition. For the Philippines, he said, the question is whether Pax Silica would help Filipino researchers, engineers and enterprises acquire capabilities that will remain useful even after particular foreign investors depart.
Would local suppliers gain access to more advanced production processes? Would universities participate in sustained research partnerships? Would the Philippines develop businesses capable of designing and manufacturing technologies for domestic needs?
Without those commitments, Tapang warned, the Philippines could simply reproduce the export-oriented arrangements it has experienced for decades.
He also questioned whether projected employment figures adequately distinguish between construction jobs, permanent manufacturing positions and employment in highly automated facilities.
The existence of an industrial park is not, by itself, evidence that an industrial economy has been built.
Between Washington and Beijing
Herman Kraft of the UP Department of Political Science situated the discussion within an international system increasingly shaped by competition between the United States and China. Advanced semiconductors, critical minerals, AI, and control over supply chains are now closely connected to economic and national security.
The global semiconductor industry is divided among highly specialized economies competing for control of its most valuable technologies and production capabilities. American companies remain influential in chip design, while Taiwan leads in advanced logic-chip fabrication, South Korea dominates much of memory-chip production, and China has substantial capacity in mature semiconductor technologies.
An Organisation for Economic Co-operation and Development (OECD) study found that China, Taiwan, South Korea, Japan and the United States together account for nearly 90% of global wafer-fabrication capacity. Their interdependence has become a strategic vulnerability as governments seek to secure critical materials, expand domestic production and reduce exposure to supply disruptions. Pax Silica is part of Washington’s effort to build more resilient technology supply chains with countries aligned with its economic and security objectives.
For countries such as the Philippines, that competition creates opportunities as well as pressure to choose sides. Kraft questioned whether the Philippines’ choices should be understood solely as alignment with one power or the other.
“Must the choice be binary? China or the United States?” Kraft said. He argued that the Philippines cannot control the rivalry between major powers, but it can strengthen its capacity to define and pursue its own interests.
That means reducing vulnerabilities through effective institutions, stronger domestic industries, and the ability to implement policies independently. Rather than merely accepting arrangements determined elsewhere, the Philippines should develop the capacity to negotiate from a position of greater economic strength.
Who gains?
The government has grounds to pursue opportunities in advanced manufacturing. The semiconductor industry is central to modern economic life, and the Philippines cannot assume that existing assembly and testing activities will always be competitive.
New investment could create jobs, strengthen research and give Filipino companies opportunities to participate in industries that will shape the coming decades. But those outcomes will depend on decisions that have yet to be fully disclosed.
For now, the most clearly identifiable strategic beneficiary is the United States, which initiated Pax Silica to secure critical minerals, manufacturing capacity and semiconductor supply chains among trusted partners. Private technology and manufacturing firms that eventually establish operations in the proposed industrial hub could also benefit from access to land, infrastructure and investment incentives.
BCDA has proposed a two-year grace period on lease payments, with subsequent rental terms to be negotiated. For the Philippines, the potential benefits include skilled employment, greater domestic mineral processing, stronger local suppliers and technological upgrading.
But who ultimately captures the largest economic gains will depend on the final agreements, the location of higher-value production activities, and whether foreign manufacturers are required to develop local capabilities. Without these details, projections of investment and employment cannot establish how much value will remain in the Philippine economy.
The proposed industrial hub will need credible environmental assessments, detailed resource plans, meaningful community consultation, enforceable investment obligations, and a strategy for transferring technological capabilities to Filipino workers and institutions. Otherwise, promises of industrial progress could coexist with continued economic dependence.
The forum speakers approached Pax Silica from different disciplines, but their arguments converged on one concern: National development must be measured by what remains in the country after investment arrives. Factories may be built. Minerals may be processed. Electronic components may eventually leave Philippine ports for markets worldwide.
The harder measure is whether Filipinos gain lasting control over the industries, technology and resources that make those exports possible.
That is why the question posed by the forum matters. Progress is not merely about what gets built. It is about who benefits, who bears the costs, and who makes the decisions. CS
Read more: Pax Silica: A case for caution and a better path forward
Hannah L. Tabunda is a journalism graduate of the University of the Philippines Diliman and a contributor to CoverStory. Her interests include feature writing, multimedia journalism, and “stories that explore people, culture, and lived experiences.” She also engages in such combat sports as karate, Muay Thai and boxing, and has taken up bouldering and top-rope climbing.
