The Philippines has joined Pax Silica, a US-led coalition countering China’s dominance in tech supply chains, and is set to host the initiative’s first Economic Security Zone in New Clark City, Tarlac. Government officials cite major job and revenue projections, while farmers’ groups, Indigenous advocates, and environmental organizations dispute the project’s water use, displacement estimates, and long-term economic terms.
A Coalition The Philippines Joined Late
The Philippines has formally joined Pax Silica, a United States-led coalition established in December 2025 to secure global supply chains for semiconductors, artificial intelligence, and critical minerals. The coalition was formed in part to counter China’s dominance in tech manufacturing, particularly its control of an estimated 90 percent of global rare earth refining capacity. Pax Silica began with nine founding members and has since expanded to more than 30 participating countries. The Philippines joined in April 2026 as the 13th member, entering after the coalition’s core framework had already been established by its founding participants.
Under the agreement, the Philippines is set to host Pax Silica’s first Economic Security Zone, a proposed industrial hub covering approximately 1,620 hectares within the 9,450-hectare New Clark City development in Capas, Tarlac. The Bases Conversion and Development Authority (BCDA), the state agency overseeing the project, forecasts the hub could generate up to 200,000 jobs and as much as PHP180 billion in annual government revenue, with more than 30 companies reportedly expressing investment interest. Three industries are expected to anchor the zone: AI-related hardware manufacturing, semiconductor production, and mineral processing, given the Philippines’ nickel and copper deposits. Trade officials have said the plan centers on manufacturing AI components rather than operating large-scale AI data centers.
Water, Power Projections, And Displacement Figures In Dispute
Resource consumption has emerged as a central point of dispute. BCDA’s own estimate places water use at more than 5 million gallons daily, primarily for cooling systems. To meet the water requirement, they proposed a surface water harvesting system that draws from rainwater rather than groundwater, citing rising arsenic levels in groundwater elsewhere in Central Luzon, with an initial design capacity of 120 million liters per day against a projected requirement of 65 to 90 million liters per day. An independent estimate cited in press coverage puts potential demand far higher, calculating that a single 1-gigawatt data center could require approximately 15 billion liters of water annually, about twice New Clark City’s current total water demand, in a region facing an estimated annual water deficit of 5 trillion liters. On electricity, the Makabayan Bloc in Congress has stated the project risks giving the Philippines the highest power rates in Asia. No official or independently verified figure for the hub’s projected share of Luzon’s grid capacity was found in available reporting.
Displacement estimates present the widest gap between official and advocacy accounts. Groups including Kalikasan People’s Network for the Environment estimate that as many as 20,000 residents and 15,000 farmers, including members of the Aeta Indigenous community, could be displaced by the project. BCDA disputes this figure, stating the site is titled public land with no ancestral domain claim attached, and that only around 10 farmers are directly affected, with the project expected to generate about 200 related jobs. Farmers in Capas have told reporters they are already being asked to relocate. Environmental groups have separately raised concerns that noise from the industrial hub could disturb local wildlife, particularly birds; BCDA has responded by citing its Environmental Compliance Certificate requirements.
Pushback And Previous Precedents
Various Filipino groups have characterized Pax Silica as a “massive sellout” of Philippine land, minerals, and sovereignty, arguing the arrangement positions the country as a supplier of raw materials and low-value labor while higher-value technology, control, and profit remain with the United States. The Makabayan Bloc has filed a House resolution seeking a formal investigation into the project’s implications for US economic and military influence in the country.
The Philippines has faced a comparable scenario before. Intel operated in the country for 34 years before closing its assembly and test facility in Cavite in 2009, a decision that cut 1,800 jobs and removed roughly 15 percent of the Philippine Economic Zone Authority’s total export revenue at the time. That closure was driven primarily by Intel’s global restructuring and the 2008-2009 financial crisis rather than domestic policy failure, though the Philippine government was blamed by some critics regardless. Capital had already been shifting toward newer facilities in Vietnam and Malaysia in the years before the closure was confirmed. The structural parallel to Pax Silica lies in the Philippines’ position within a larger network it does not control: in 2009, one replaceable site within a single company’s global operations; today, one member within a 30-plus-country coalition it joined after the framework was set.
What Comes Next
BCDA has said it aims to finalize a framework agreement with Washington within two to three months of recent statements, with a separate land use agreement expected to be signed in November and an investment forum planned for September. The Department of Environment and Natural Resources has said it will require an environmental impact statement and management plan before development proceeds, with ongoing monitoring by its Environmental Management Bureau.
