THE United States has embarked on a massive investment in the Philippines to build and expand the world’s semiconductor, artificial intelligence (AI) and advanced microchip industries and reduce its dependence on China. Several countries — including Australia, India, Israel, Japan and Singapore, as well as several European nations — have joined the US-led Pax Silica initiative, contributing capital, technology and strategic support. The Philippines has been chosen as the principal operational site for this major investment, covering a vast 4,000 acres (1,619 hectares) in Tarlac’s New Clark City because of the country’s vast mineral reserves that are indispensable to industries under Pax Silica.
The world is well aware of our substantial mineral deposits. Large quantities of copper are found in Tampakan, South Cotabato, that are essential for microscopic wires and semiconductor circuits. The country also possesses one of the world’s largest nickel reserves, with extensive deposits in Palawan, Surigao, and the Dinagat Islands. Nickel is used in lead frames, support structures and corrosion-resistant plating, and cladding for electronic components.
Gold is highly valued for wire bonding and its superior conductivity in microchips. Significant gold deposits are mined in Diwalwal, Davao de Oro, and Masbate. The country also has large deposits of silver, cobalt, and other rare earth minerals in Zambales, Palawan, and other mining areas in southern Mindanao. These precious minerals are indispensable inputs in advanced microchip processors, AI systems and next-generation electronic devices.
The Philippines signed on to the Pax Silica initiative in April as its 13th member and committed 4,000 acres in New Clark City as its main operational site. This planned economic security zone is envisioned as an AI-industrial acceleration hub designed to challenge China’s dominance in advanced semiconductor manufacturing. It is expected to strengthen access to locally mined critical minerals while supplying the downstream manufacturing of advanced microchips and emerging technologies.
However, Pax Silica has drawn criticism. Some see it as a neocolonial undertaking that would only deepen the foreign stranglehold on the Philippine economy while exposing the country to wider geopolitical tensions and even outright armed conflict with China. Others have raised serious concerns about environmental damage, displacement of farming communities, and intensified mineral extractions that lead to ecological disaster and local conflict.
Pax Silica is being promoted as the next Silicon Valley in the Indo-Pacific corridor. It is widely acknowledged that China controls a large share of the world’s rare earth mineral processing, giving it an enormous advantage in advanced microchips and AI technologies — the world’s future. The Philippines is strategically positioned to become a major manufacturing hub because many of these earth minerals are extensively found within its territory. Yet this blessing also places the Philippines in a dangerous situation, making it a potential target of China, which seeks to thwart US influence in the region. Although Pax Silica promises to create more employment opportunities and increase foreign investment here, there is a risk that the Philippines will continue to serve primarily as a mere supplier of raw and extracted minerals, while the high-level technologies and intellectual property remain in more advanced countries. Today, the Philippines is still at the lower rung of the global semiconductor value chain, and without strategic intent to develop our own domestic capabilities, Pax Silica alone may not totally alter this status quo for us.
Despite Washington’s designs to “use” the Philippines, it is both practical and prudent for the country to attract more foreign investments as a hedge against any future armed attack by China. With a major technology hub essential to many advanced economies, it could be a powerful deterrent for China to attack the Philippines or, otherwise, launch cyberattacks on critical infrastructure. Yet any aggressor calibrating to threaten the Philippines would have to weigh the consequences of disrupting the global supply chain and antagonizing many powerful countries. Pax Silica is now becoming our economic security blanket against geopolitical tensions. Much like the Subic Naval Base and Clark Air Base built by the Americans, this initiative shall emerge as the country’s strategic security asset for decades to come.
But rather than just exploiting our raw minerals or inviting foreign investment, the country must take advantage of Pax Silica to elevate its manufacturing capabilities, innovation and human capital. Instead of hiring more miners and cargo haulers, the Philippines must produce scientists, engineers and innovators, who can propel our nation into a globally competitive and upper-income economy. The vision of Pax Silica must not be confined alone as a counterbalance for China but to bring trade competition right into China’s doorsteps and reignite our nation’s industry.
