As geopolitical competition over semiconductors and artificial intelligence intensifies globally, the Philippines has formally aligned itself with a US-led technology alliance and committed to hosting what could become one of the largest economic development zones in the country’s history — a sprawling AI and chip hub in the heart of Central Luzon, backed by an initial $10 billion in capital and a list of unresolved questions that critics say deserve public answers before any binding agreement is signed.
The project, centered on a 1,619-hectare site inside New Clark City in Capas, Tarlac, is the Philippines’ designated entry point into Pax Silica — a coalition of allied nations working to build secure, China-independent supply chains for semiconductors, critical minerals, and AI infrastructure.
What Pax Silica Is — and What the Philippines Signed
Pax Silica was launched at a summit held in Washington, D.C. on December 12, 2025, convened by US Under Secretary of State for Economic Affairs Jacob Helberg. According to the alliance’s founding documents, its core objective is to establish trusted, resilient supply chains for semiconductors, critical minerals, and artificial intelligence technologies among partner nations — and to reduce global dependence on China, which the alliance estimates controls roughly 90 percent of the world’s rare earth refining capacity.
The Philippines became a signatory in April 2026, when Trade Undersecretary Ceferino Rodolfo signed the declaration on the country’s behalf, making the Philippines the 13th member of the coalition. Other signatories include Japan, South Korea, Australia, India, Israel, Singapore, the United Kingdom, the Netherlands, and the European Union. The exact membership count, however, remains disputed: the US State Department lists 23 signatories, while Bases Conversion and Development Authority (BCDA) president Joshua Bingcang has cited 35 member countries.
Critically, the declaration signed by the Philippines is explicitly non-binding — a two-page document that carries no enforcement mechanism. The legally consequential commitments are to be contained in a framework agreement currently under negotiation, with a target signing date in November 2026.
The Site: Former Military Land in Capas, Tarlac
The planned Economic Security Zone will occupy 1,619 hectares of public land administered by the BCDA within New Clark City, the government-developed urban center in Capas, Tarlac, built on former military reservation land. According to BCDA, the zone is designed as an integrated industrial ecosystem combining semiconductor assembly, testing, and packaging; electronics manufacturing; AI data centers; research and development laboratories; and mineral processing facilities.
Finance Secretary Frederick Go has publicly identified Taiwan-headquartered Foxconn — the world’s largest contract electronics manufacturer and a major supplier to Apple — as the anchor investor for the zone. The BCDA has further disclosed that more than 30 companies have already submitted letters of interest to participate in the project.
Investment Figures and Employment Projections
According to BCDA figures, the hub requires approximately $10 billion in initial investment to get off the ground, with projections scaling to between $40 billion and $70 billion at full operation. The authority further projects ₱68 billion in annual tax revenues at full buildout, ₱60 billion in government lease income accumulated over 25 years, and $200 billion in export potential.
On the jobs front, the BCDA’s official employment estimate ranges from 130,000 to 190,000 direct positions and 500,000 to 800,000 indirect or induced jobs — the basis for the “up to one million jobs” figure that has appeared in Malacañang briefings. Critics, however, note that the methodology underlying these projections has not been published, raising questions about their reliability.
Water Supply: Assurances Without Published Plans
Environmental group Kalikasan has warned that a facility of this scale could consume millions of gallons of water daily through evaporative cooling systems, potentially drawing resources away from surrounding farms and communities. The group has specifically flagged the Sacobia watershed — New Clark City’s principal water source — as showing signs of stress since 2020.
The BCDA has responded that the hub will rely primarily on harvested rainwater through impounding facilities rather than groundwater extraction, and that the project will not move forward without certification from the Department of Environment and Natural Resources confirming a sustainable water supply. No detailed technical plan has been made publicly available, however, leaving both the official assurance and the environmental concerns resting on projections rather than verified documentation.
Displacement: A Gap That Remains Unresolved
Among the most contested aspects of the project is the question of who will be displaced by it. Kalikasan and allied advocacy groups estimate that as many as 20,000 residents and 15,000 farmers — including members of Aeta indigenous communities — could be uprooted by the zone’s development.
The BCDA flatly disputes these figures, stating that the site is titled public land with no ancestral domain claim on record, and that only approximately 10 farmers are directly affected, with a livelihood program and an urban farming component already prepared. Farmers in Capas have told reporters, however, that they are already being asked to relocate. Aeta advocates counter that the absence of formal ancestral domain titles reflects decades of denied recognition — not the absence of communities with legitimate land claims.
Neither side has released a verified census of affected households, making displacement the single widest factual dispute in the ongoing public debate over the project.
Power Capacity and the Governance Question
The hub is planned with a minimum of 1,200 megawatts of dedicated power capacity. Funding support is being sought through the US Development Finance Corporation’s $205-billion investment program, which has already approved a feasibility study for a liquefied natural gas terminal and power plant — addressing what Philippine officials acknowledge is a real and significant constraint, given that the country has among the highest electricity costs in Southeast Asia.
On sovereignty and governance, Philippine officials have stated that no arrangement will place the zone outside local jurisdiction and that Philippine law will govern all operations within it. The US Embassy, however, has described the zone as involving “shared governance responsibilities” — language that, according to available records, the framework agreement will need to formally define and reconcile before it can be signed.
Congressional Review and the November 2026 Timeline
The framework agreement is targeted for signing in November 2026, during the ASEAN Summit in Manila, which US President Donald Trump is expected to attend. The Makabayan bloc has filed House Resolution 1128 calling for a congressional probe into the agreement’s terms, and petition campaigns opposing the signing are currently in circulation.
As of July 2026, confirmed facts include the investment targets, the identified anchor tenant, the November signing timeline, and the designated site in Tarlac. Still unresolved are the water sustainability plan, the methodology behind job projections, the verified count of affected households, and the final governance terms between Manila and Washington.
By the Numbers
- 1,619 hectares — area of the planned Economic Security Zone in New Clark City, Tarlac
- $10 billion — initial investment required to launch the hub
- $40–$70 billion — projected total investment at full operation
- ₱68 billion — projected annual tax revenues at full buildout
- ₱60 billion — projected government lease income over 25 years
- $200 billion — projected export potential at full buildout
- 130,000–190,000 — projected direct jobs, per BCDA estimates
- 500,000–800,000 — projected indirect or induced jobs, per BCDA estimates
- 1,200 megawatts — minimum dedicated power capacity planned for the zone
- 90 percent — China’s estimated share of global rare earth refining, per alliance documents
- 30+ — companies that have submitted letters of interest to the BCDA
- 13th — the Philippines’ order of entry as a Pax Silica signatory, signed in April 2026
- 23 vs. 35 — disputed member count, per the US State Department and BCDA president Bingcang, respectively
Why This Matters
The Pax Silica hub represents the most ambitious attempt yet to position the Philippines as a node in global semiconductor and AI supply chains — sectors that major economies are racing to secure amid deepening US-China technological rivalry. If the investment projections hold, the project could reshape employment and industrial capacity in Central Luzon on a scale comparable to the Subic Bay and Clark economic zones established after the US military’s departure in 1992. However, the gap between confirmed facts and unresolved questions — on water, displacement, governance, and job methodology — means that the public debate over the project is, in important ways, still being conducted without the full information needed to assess its real costs and benefits.
Source: Originally reported by Rappler
