OVER the past week or so, there has been a rash of reports about Philippine and United States officials slobbering all over themselves with joy at the imagined prospect of the Philippines turning into some kind of artificial intelligence (AI) industry powerhouse through the nebulous “Pax Silica” initiative of the Trump regime. That the Philippine government and supposedly bright people like finance chief and overall economic guru Frederick Go would fall for such nonsense is embarrassing but actually not that surprising, given the propensity of this country to clutch at any imagined silver-bullet alternative to building national prosperity through hard work.
What we have been told the plan involves is for the US — or rather, US or US-friendly companies — to invest in the development of a 1,618-hectare “AI-native hub” in New Clark City in Tarlac, which is expected to attract AI and chip manufacturing investments. Various numbers have been batted around as to the actual size of the proposed economic zone; some reports say it will be as large as 4,000 ha.
The “Pax Silica” initiative, as described by the US government, is a US-led initiative to build a secure, innovation-driven silicon supply chain spanning critical minerals, energy, advanced manufacturing, AI and logistics, and aimed at reducing reliance on China, which currently dominates most of these things. The Philippines signed on to the initiative back in April, and it currently includes 22 other countries besides the US and the Philippines: the European Union, Japan, South Korea, Singapore, India, the United Kingdom, Germany, Finland, the Netherlands, Norway, Sweden, Greece, Israel, Kazakhstan, the United Arab Emirates, Qatar, Australia, Argentina, Chile, Costa Rica, El Salvador and Panama.
On the face of it, the initiative seems like a good idea; diversifying the tech, electric vehicle, and renewable-energy supply chains beyond China will help make all those sectors more resilient, and lessen the geopolitical impact on them. However, we are dealing with a US regime that has absolutely no concern whatsoever for the benefits that might accrue to other countries, and is solely focused on supporting its own AI sector. Other countries could benefit, but only in terms of the scraps they can pick up after the needs of the US tech sector are satisfied. To further complicate matters, everyone involved in the “Pax Silica” is being forced to choose sides: the US or China.
The Philippines is in no position to do that. While we might look on the US more favorably due to China’s overbearing aggression in the South China Sea and in other matters, trading one exploitative power for another is not really a solution. This is particularly true when what the alternative power is offering is going to have more negative consequences than positive ones.
To understand how the Pax Silica is exploiting the Philippines, we need to examine what needs the US is trying to meet for its own tech industries. First, there are the critical minerals: silicon, nickel, copper, and rare-earth minerals such as lithium, cadmium, neodymium, dysprosium, and a few others. Second, there is the need for more manufacturing capacity for the memory chips and other components that are in high demand for AI operations. Third, there is a need for more AI data centers, which are gobbling up all of the above resources, as well as enormous amounts of electricity and water.
Data centers
What can the Philippines reasonably offer to meet these needs? First, in terms of raw materials, the Philippines does have substantial nickel and copper resources; cadmium is often found along with those ores, so the country can supply some of that, as well. It is not an exceptional source of any of these things, and so far, as is known now, the Philippines does not have commercially viable reserves of any of the rare-earth minerals.
In terms of manufacturing memory chips and other components, the Philippines has a readily available workforce, and it has space for facilities, but that’s about it. That kind of manufacturing requires abundant and, above all, extremely stable electricity supply, and that is obviously questionable at best here.
That brings us to the potential for the Philippines to host the massive AI data centers that are required to run this particularly ridiculous technological fad. Again, the Philippines has at least some land space for this, and it has the temporary construction workforce required to build such facilities, but in other respects, it is highly unsuitable. Data centers have voracious appetites for two things: electricity and water. The power problem could hypothetically be resolved by building generation to serve the data centers, but water is the big hang-up; the country is already considered “water-stressed,” and at the moment — and for the next eight to 10 months, if not longer — it is facing a dire drought situation due to El Niño.
The possibility of building data centers in the Philippines is the real reason the US government and new US Ambassador to Manila Lee Lipton keep talking up Pax Silica as a high priority. The Philippines is at a competitive disadvantage when it comes to raw material supply or manufacturing capability, but its current leadership has demonstrated that it just may be stupid enough to fall for the “hosting AI data centers” aspect of the plan. This is important to the US because the backlash against data centers in the US is becoming severe.
As one example, and one that I am particularly proud to share, my own hometown of Lancaster, Pennsylvania, just this week — by a unanimous vote of the city council, which is rare — passed draconian regulations that all but guarantee that no data centers will be built in the city. The nearby borough of Columbia also passed similar rules, and in news that infuriated US president Bobo the Simpleminded last week, the entire State of New York imposed a complete moratorium on data centers, including those already under construction, for at least a year, with the implication being the ban may become permanent.
The current US regime, and the tech plutocrats it caters to, desperately need to find jurisdictions and officials gullible enough to entertain their data center aspirations. It is disappointing, but in hindsight perhaps not so surprising, that they showed up in Fred Go’s office.
For what it’s worth, I wouldn’t expect any progress at all to be made on Pax Silica here. The AI industry is probably within six months of a catastrophic collapse, for various reasons, and so is the Trump regime. None of that will let the Philippines’ leaders off the hook for their unwillingness or inability to read the room, and that is something that will need to be addressed, but at least we have reason to hope that we will not have to suffer the practical effects of this “Pax Stupida.”
ben.kritz@manilatimes.net
Bluesky: @benkritz.bsky.social
Website: www.badmannersgunclub.com
