President Ferdinand “Bongbong” Marcos, Jr. (PBBM) recently acted on what he regarded as a bold step to significantly add to the country’s productivity and growth. This is the participation of the Philippines as a signatory and key player in the US Pax Silica initiative.

This US initiative immediately drew strong opposition from supposed nationalists-cum-environmental activists and security experts, but dismissed by China critics as nothing but China’s proxies, for this US-led effort is basically positioned to reduce global reliance on Chinese semiconductor and critical mineral supply chains. 

China critics also see it as the country’s tangible message to rebuff China’s bullying tactics and wanton behavior toward the fisherfolks and territorial integrity of the country in the West Philippine Sea.  

The Pax Silica is a strategic program by a 14-nation alliance led by the US. It was launched in December 2025 as a framework aimed at mobilizing allied economies around shared industrial and security priorities, notably designed to secure AI and semiconductor supply chains.  

The Philippines joined the alliance last April 17 as the 13th member. In turn, the country agreed to host a massive 4,000-acre (1,619 hectares) “Economic Security Zone” (ESZ) industrial hub located within the Luzon Economic Corridor (LEC), in New Clark City, Tarlac. This hub is a hi-tech industrial zone that is reportedly to be the first of its kind in the world, and intended to transform the Philippines from a basic assembly site into an “AI-native” powerhouse for higher-value chip manufacturing and logistics.  

The LEC is a flagship project of the “G7 Partnership for Global Infrastructure and Investment” (GII), launched in April 2024 by then-US President Joe Biden, Japan’s then-Prime Minister Kishida Fumio, and Marcos, as a coordinated, high-impact investment area in key sectors, including transportation, clean energy, digital infrastructure, and advanced manufacturing.  

The LEC’s goal is to  transform Luzon into four major economic hubs. It will link Subic Bay, Clark, Manila, and Batangas and provide “high-standard” infrastructure which will reduce transport costs, streamline logistics and deliver investment alternatives to investors. 

As of this month, among the member-nations are the US, Australia, Finland, Greece, India (joined in February 2026), Israel, Japan, Philippines, Qatar, Singapore, South Korea, Sweden, United Arab Emirates or UAE, and the United Kingdom. Also admitted to participate in the program as guests or observers are the Netherlands, the European Union, Canada, and Taiwan, with the Netherlands acting as a “non-signing partner.”  

Semiconductors are already the country’s top export. Yet, as of today, its role has been largely confined to the lower-value work of assembly, testing and packaging. The country’s participation in the initiative will help the Philippines move up the ladder towards higher-value activities in the global chip supply chain, such as advanced packaging, integrated circuit design and wafer fabrication, supported by technology transfer, upskilling and improvements in infrastructure.  

Again, the US Pax Silica initiative focuses on critical minerals, semiconductors, and AI, with the aim of building a secure “silicon supply chain.”

Framework of the strategic alliance and growth path

The industrial hub for Pax Silica initiative is set to operate under a special legal arrangement. The United States will initially use the land rent-free for two years. This will be treated as an “in-kind contribution” from the Philippines to support the development of economic cooperation and AI-native investment acceleration. This contribution is also framed as a strategic move to position the Philippines as a “Golden Node” or vital central hub for global tech ecosystem, specifically focusing on high-value technology and manufacturing involving artificial intelligence (AI), semiconductor, and critical minerals. Use of the ESZ after the initial two years will be subject to a renewal for up to 99 years.  

The ESZ will operate under US common law despite being on Philippine soil. It will be granted diplomatic immunity, similar to the protections afforded to an American embassy.

Starting from the third year, the annual lease rate will be determined through a separate agreement.  

With the industrial hub designed to move the country from low-value assembly and testing into high-value activities like IC design, wafer fabrication, and advanced packaging, the Department of Trade and Industry (DTI) has set an ambitious target of US$110 billion in annual chip exports by 2030.

As the first “AI-native investment acceleration hub,” the ESZ will integrate AI into manufacturing ecosystems from day one. This is expected to attract high-quality private sector investment coupled by the leverage enjoyed by the Philippines with its significant mineral resources like nickel, copper, and cobalt (which are increasingly vital to global supply chains) and skilled workforce. 

The government is optimistic the ESZ will stimulate local industries generate significant employment and accelerate technology transfer while it strengthens economic security ties especially with the US and Japan. 

Critical opposition

When the news broke out, the Makabayan bloc (a known left-leaning political wing) in the Philippine House of Representatives publicly opposed the initiative, arguing it subordinates the country to US “war production” and increases the risk of economic coercion or trade retaliation from China.

Local groups like the Kilusang Magbubukid ng Pilipinas (KMP) also suddenly jumped into action to label the initiative a “sellout” of Philippine sovereignty, particularly criticizing the plan to operate the 4,000-acre ESZ under US common law rather than Philippine law.

China currently remains the primary processor of critical minerals mined in the Philippines. The Pax Silica initiative’s goal of creating a supply chain that excludes Chinese involvement certainly challenges China’s dominance locally. This is why China critics cannot believe China is not in any way involved in actively counter-attacking the Pax Silica initiative.

As noted by China critics, there is increased pro-China/anti-US narratives on social media framing the Pax Silica hub as a military base in disguise or a threat to local livelihoods. Fact-check reveals they originate from accounts previously identified as sources of Chinese disinformation.

Final word

The vulnerabilities we are again suffering from the current economic aftershocks as a result of the continuing conflict in the Middle East should serve as our structural and systemic compass on what we should make out of the US Pax Silica initiative for the country.  

We can’t also simply fully trust the sudden conciliatory behavior of China by remembering how it has been treating us until we had this present opportunity. We have to see more proof that China is renouncing its tendencies to create a hegemony.  

In turn, we must bargain well with the US for true commitment and buffer ourselves from the losing end of any bargaining. Let us keep our resources to our utmost benefit to help the people move forward. – Rappler.com

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