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The Philippines is offering 1,620 hectares, its water, its power grid, and communities that hold no land titles to a US-led AI coalition. The numbers are contested. The land is already moving.
In Capas, Tarlac, the land remembers what it means to host the ambitions of great powers. The province bore the Bataan Death March. It held the largest prisoner-of-war camp in Philippine history. For decades, its soil was American military property. When those bases were handed back in 1992, a government agency renamed the land New Clark City and called it a fresh start.
Now the world's most powerful country is back — this time with a coalition of 30-plus nations, a plan for semiconductor factories and AI infrastructure, and a name that blends the Latin word for peace with the material that makes every computer chip on the planet.
Pax Silica.
The pitch is elegant. The Philippines has what the AI revolution needs: nickel, copper, cobalt, a young English-speaking workforce, and an electronics manufacturing base already plugged into global supply chains. Instead of shipping raw ore to Chinese smelters, the country would process it here. Instead of assembling other people's circuits, it would manufacture its own high-value components. The numbers floated by the Bases Conversion and Development Authority are staggering — $40 to $70 billion in potential investments, 130,000 direct jobs, export revenues across a 30-year horizon.
The question no government briefing fully answers is simpler:
What does the Philippines give up to get there?
What Is It, Really?
Pax Silica is not, first and foremost, a Philippine project. It is a United States–led coalition, launched in Washington, D.C. in December 2025, meant to build a global supply chain for artificial intelligence, semiconductors, and the critical minerals that feed both. The idea, in Washington's framing, is to reduce dependence on China for the materials and manufacturing that power the AI economy, by knitting together a network of "trusted" partner countries.
The Philippines joined in April 2026 as the coalition's 13th member; the group has since grown to more than 30 countries. As its contribution — and its bid for a piece of the investment — the government has offered roughly 1,620 hectares inside the 9,450-hectare New Clark City in Capas, Tarlac, to be developed as an AI and advanced manufacturing hub under the Bases Conversion and Development Authority (BCDA). Officials describe it as the anchor project of the broader Luzon Economic Corridor, an initiative meant to draw investors into Subic, Clark, and the surrounding provinces.
The pitch from government economic managers is straightforward: instead of shipping out raw nickel, copper, and other minerals for other countries to refine and profit from, the Philippines would process them here, and use them to manufacture the high-value components that go into chips and AI hardware. BCDA president Joshua Bingcang has been explicit that this is meant to be a manufacturing hub, not primarily a data-center complex — though a large-scale AI and chip ecosystem will inevitably need substantial computing capacity as well.
The project is still in the planning stage. No shovel has broken ground on the industrial buildings themselves, though supporting infrastructure — power and water studies, land clearing discussions — is already moving.
Who Are the Stakeholders?
Several parties have a direct stake in how this unfolds:
- The Philippine national government, particularly Malacañang, the Department of Trade and Industry (DTI), and BCDA, which is managing the site and courting investors.
- The United States government, through the State Department, which is treating Pax Silica as a geopolitical as well as economic project — part of a broader effort to counterbalance China's dominance in tech manufacturing.
- Foreign and local investors, including at least 20 companies the U.S. says have expressed interest in the Luzon Economic Corridor, plus specific partners like Saudi Arabia's ACWA Power, which is already developing a 500-megawatt solar project at the site.
- The National Grid Corporation of the Philippines (NGCP), which is planning a roughly ₱7-billion dedicated substation to serve the hub's power needs, and the Department of Energy (DOE), which is still drafting the rules for how the project's electricity will be sourced.
- Local communities in Tarlac — farmers, and Aeta communities whose ancestral and actual presence in and around New Clark City predates the master-planned city itself.
- Indigenous peoples' advocates and environmental groups, chief among them Kalikasan, which has raised alarms about land and water impacts.
- Progressive lawmakers, particularly the Makabayan bloc in the House of Representatives (Antonio Tinio, Sarah Jane Elago, Renee Louise Co) and farmer-advocacy groups like the Kilusang Magbubukid ng Pilipinas (KMP), who oppose the project on sovereignty and equity grounds.
- Independent economists, such as Cielo Magno, who argue the debate should not be framed simply as "for" or "against," but as a question of what conditions and safeguards the country negotiates.
- Ordinary Filipino electricity and water consumers, who are not formal parties to any agreement but stand to feel its downstream effects on utility rates and resource availability, whichever direction those effects run.
What Supporters Say the Philippines Gains
Government officials and project proponents point to a cluster of benefits:
- Moving up the value chain. Instead of exporting unprocessed critical minerals — a pattern that has defined Philippine extractive industries for decades — the country would process them domestically, capturing more of the value that currently flows abroad.
- Jobs. BCDA has floated a figure of more than 130,000 high-quality jobs once the hub is fully developed, spanning mining-adjacent processing, chip manufacturing, and AI-related work.
- Geopolitical positioning. Being inside a U.S.-anchored coalition of over 30 countries is framed as a hedge against overreliance on China and a way to attach the Philippines to a higher-value slice of the global tech economy, rather than remaining a labor-cost destination.
- Infrastructure spillovers. The project is already triggering related investment — a dedicated power substation, a proposed 500-MW solar project, discussions of new fuel and LNG pipelines connecting Subic and Clark — infrastructure that, in theory, could benefit the wider Central Luzon economy even beyond the hub itself.
- No new mining, government says. BCDA has stated explicitly that no mining will occur within the project site itself; the intent is to process minerals sourced elsewhere into higher-value components.
- Land already designated. Officials note the site is titled public land under BCDA's own charter (1992), already earmarked for industrial use in New Clark City's master plan, not ancestral domain land — and that more than 15,000 hectares elsewhere in the Clark Special Economic Zone have separately been set aside for indigenous communities.
The Ground Beneath It All
The site is 1,620 hectares inside New Clark City, Capas, Tarlac — land administered by the BCDA under its 1992 mandate to convert former US military holdings into economic assets. Officials are clear on two points: the land is titled public property, not ancestral domain, and more than 15,000 hectares elsewhere in the Clark Special Economic Zone have already been set aside for indigenous communities.
That is the government's position.
On the ground, environmental group Kalikasan puts a different number on the table. Up to 20,000 Aeta community members and 15,000 farmers, its national coordinator Cathleen De Guzman says publicly, could be displaced — not just from the 1,620-hectare footprint, but across the wider zone of impact. BCDA President Joshua Bingcang fires back: approximately 10 farmers are directly affected, livelihood programs and urban farming support have been offered, and the project site carries no ancestral domain title.
Neither side explains its arithmetic. Ten and 20,000 are not measures of the same thing — one counts the immediate occupants of the designated parcel, the other counts the communities whose water, livelihoods, and movement corridors fall within reach of a major industrial complex. Both figures remain unverified.
What De Guzman said to the South China Morning Post is harder to dispute on historical grounds: "The absence of a paper document was used to erase the existence of a community that has lived there since before the Spanish arrived." The Aeta of Central Luzon were present in this landscape long before any title deed, any base, any conversion authority. In barangays like O'Donnell and Aranguren, residents report short notices and offers they call inadequate.
The land does not exist in the abstract. People live on it. The question of who counts, and who gets to decide, has not been resolved publicly.
130 Million litters a day
Semiconductor manufacturing is hungry for water. Not ordinary water — ultrapure water, used in wafer-cleaning processes that must remove contamination at the molecular level. AI data centers add cooling loads on top of that. Some large-scale AI facilities abroad consume up to 5 million gallons — nearly 19 million liters — of water daily just for cooling and operations.
Preliminary estimates for the full Pax Silica hub put total water demand at approximately 130 million liters per day. That figure, cited in an Inquirer investigation, is roughly equivalent to the daily consumption of 600,000 Filipino households.
An independent estimate goes further: a single 1-gigawatt data center could require approximately 15 billion liters annually — about twice New Clark City's current total water demand — in a region already facing an estimated annual water deficit of 5 trillion liters.
The Sacobia watershed, the main water source for New Clark City, has faced documented drying concerns since 2020. BCDA's answer is rainwater harvesting: surface-water capture, impounding infrastructure, seasonal storage, and recycling systems designed to make the project self-sustaining. BCDA President Bingcang says they will build a dam or impounding area, with surplus water shared with the community.
Scientists are unconvinced. Rainfall in Central Luzon is seasonal. El Niño conditions have grown more intense and frequent. The question Kalikasan's De Guzman keeps asking is the one that cannot be answered by a press briefing: where is the scientific data? What does the water balance study actually show? Who has independently verified it?
No publicly released, independently verified water impact assessment exists yet. Until it does, farmers and households downstream of the Sacobia watershed are being asked to accept verbal assurances from the same authority that wants to build the project.
₱12.43 per kilowatt-hour — and rising?
Philippine electricity rates are already among the highest in Asia. At roughly ₱12.43 per kilowatt-hour for residential consumers, households here pay more for power than most of their neighbors. The national grid routinely triggers red and yellow alerts — signals of insufficient reserve — and forced outages have become a feature, not an exception, of Philippine electrical life.
Into this grid, Pax Silica proposes to plug a major new industrial load.
BCDA's own estimates put the hub's electricity demand at approximately 3,000 megawatts at full development. The Makabayan bloc in the House of Representatives — citing its own calculations — puts the figure closer to 5 gigawatts. The Inquirer calculates BCDA's figure as equivalent to the power consumption of more than 8 million Filipino households running continuously for a month, equivalent to 16 percent of Luzon's current grid capacity.
The gap between 3 and 5 gigawatts is not a rounding error. It is the difference between a manageable industrial load and a structural transformation of Central Luzon's energy system. Neither side has released an independently verified load study. The debate is being conducted on competing projections.
BCDA's answer is a dedicated renewable energy supply — including a 500-megawatt solar project already under development by Saudi Arabia's ACWA Power, plus potential LNG-backed generation, all separate from the residential grid. The National Grid Corporation of the Philippines is planning a dedicated ₱7-billion substation to serve the hub, targeting completion by end-2028.
The Makabayan bloc has stated plainly that Pax Silica "threatens to permanently lock the Philippines into having the highest power rates not just in Southeast Asia but in all of Asia."
The Department of Energy has acknowledged publicly that it is still drafting the circular that will govern how the project's power is actually sourced. The rules are not written. The investment discussions are already underway.
The value chain question
Here is the government's strongest argument: the Philippines has spent decades extracting raw minerals and watching other countries process them for profit. Pax Silica, supporters say, is a structural break from that pattern. Process the nickel here. Manufacture the components here. Capture the value that has always flowed elsewhere.
It is a compelling case. It requires close reading.
The global semiconductor supply chain runs from mine to chip design at the top — where companies like TSMC, NVIDIA, and Qualcomm control patents and fabrication processes worth trillions — down to assembly, testing, packaging, and materials processing. The Philippines has historically occupied the lower end: assembly, testing, electronics manufacturing. What is proposed for New Clark City is an upgrade within that lower portion. Higher value than raw ore. Lower value than chip design, intellectual property, or advanced fabrication.
BCDA projects 130,000 to 190,000 direct jobs at full development. The Philippine Herald raised a pointed historical comparison: Intel operated in the Philippines for 34 years before closing its assembly and testing facility in Cavite in 2009, cutting 1,800 jobs and removing roughly 15 percent of the Philippine Economic Zone Authority's total export revenue in a single announcement. That closure was driven by Intel's internal restructuring, not Philippine policy. The Philippines had no say in it.
The question of technology transfer — whether Filipino engineers and institutions gain genuine, lasting capability from the hub or remain assemblers of foreign-designed products — has not been answered with enforceable commitments. BCDA has floated the concept of "brain gain": high-skilled Filipinos building careers at home instead of leaving for Singapore or the United States. Whether the jobs created are high-skilled Filipino positions or primarily foreign-managed roles served by local technical support is not yet specified in any publicly available plan.
Until contract terms, technology-transfer provisions, Filipino hiring targets, and local supply chain requirements are public, the jobs number is a projection. The value-chain argument is a vision.
The sovereignty dimension
In May 2026, Reuters reported that the United States had requested the New Clark City economic zone operate under US law, with diplomatic immunity extended to American personnel inside the site. The Philippine government rejected the request. Officials have said repeatedly that the hub will operate under Philippine law, the Investors' Lease Act, and BCDA regulations.
The fact that the request was made — and required explicit rejection — is not a minor footnote. It describes, at least in part, how some parties to this negotiation have conceptualized what they want the zone to be. The Makabayan bloc has filed a House resolution calling for a formal investigation into Pax Silica's implications for US economic and military influence in the country. In Congress, lawmakers like Antonio Tinio, Sarah Jane Elago, and Renee Louise Co have pressed the government on what legal protections remain once a zone of this scale and strategic importance is operational.
A Freedom of Information request filed in June for the detailed site map and project documents was denied, with BCDA citing ongoing negotiations, strategic master plans, and commercial sensitivity. Citizens are being asked to evaluate the consequences of a development whose final terms are not yet fully public.
The framework agreement between the Philippines and the United States may not be signed until November 2026, during the ASEAN Summit in Manila. Until it is, every investment figure, every job projection, every assurance about water and power is attached to an unsigned document.
What the local economy stands to gain — and lose
For Central Luzon, the opportunity is real and specific. A functioning technology hub generates demand not just inside its fences but across an ecosystem: logistics, construction, food services, housing, transport, supplier industries. Universities in the region could develop research partnerships. Technical-vocational institutions could build programs tied to semiconductor manufacturing. Engineers who currently leave for Singapore, Taiwan, or the Middle East could find reason to stay.
The Luzon Economic Corridor — linking New Clark City to Clark International Airport, the Port of Subic Bay, rail connections to Manila, and logistics networks south to Batangas — gives the hub geographic logic. Infrastructure built for Pax Silica does not exist in isolation: roads, power systems, water networks, and broadband capacity built for the hub could benefit the wider province.
But infrastructure built around an industrial zone changes the character of surrounding land. Agricultural activity becomes harder to sustain alongside heavy industrial neighbors. Property values and land use shift. Migrant labor flows in during construction, not always to the economic benefit of local workers. The communities of Tarlac that live in the shadow of this development — not inside it, not employed by it, but affected by its water draw, its noise, its traffic, its transformation of a landscape — have no formal seat at the table where these decisions are being made.
The equity question embedded in the project is not abstract. The Makabayan bloc has raised it directly: if the hub receives priority and uninterrupted access to power and water during periods of shortage, while ordinary consumers face brownouts and water rationing, who is the Philippine grid ultimately serving?
The questions still waiting for answers
Economist Cielo Magno has stated what the debate actually requires: this is not primarily an investment question. It is a national development question — about who controls land, water, electricity, and the value generated on Philippine soil. The conditions she says must be met before the project proceeds include guaranteed water security for households and farmers, enforceable renewable energy requirements, measurable technology transfer to Filipino institutions, transparent and publicly accessible contracts, local supplier mandates, and independent environmental monitoring with public reporting.
These are not anti-development demands. They are the minimum conditions for any serious accounting of whether a project of this scale actually serves the public interest.
The numbers in this debate remain contested and unverified. Displacement figures: 10 or 20,000 — neither side has published a methodology. Power demand: 3 or 5 gigawatts — no independent load study is public. Jobs: 130,000 or more — no breakdown by skill level, wage, nationality of hire, or timeline. Water balance: a dam and rainwater harvesting — no independent hydrological study has been released. Environmental impact assessment: still in process.
The project is still being built on paper. The framework agreement is unsigned. The regulatory circular for power supply is undrafted. The ECC is pending. Investors are at the table under confidentiality agreements.
The Philippines still has leverage. It will not for much longer.
What this comes down to
This country has been through this before — industrial enclaves, foreign-anchored economic zones, transformative promises attached to land and resources that communities had no formal say in offering. That history does not make Pax Silica wrong. It makes the questions urgent.
Is the Philippines entering this deal as a partner with enforceable rights and a fair share of the value created — or as a platform that supplies land, minerals, water, electricity, and labor while the highest-value pieces of the supply chain — design, intellectual property, final-market profits — remain with the companies at the top of the chain?
Look at the projected $70 billion in investment. Look at the 130 million liters of daily water demand in a watershed already under stress. Look at the Aeta of Central Luzon, whose ancestral presence precedes every title deed ever issued on this land. Look at ₱12.43 per kilowatt-hour on a grid running red alerts. Look at a 99-year lease offer to foreign investors in a country where farmers are counted in single digits or in tens of thousands depending on who is doing the counting.
Look at the framework agreement that has not been signed yet.
The Philippines still has time to demand the terms be written in public, with independent verification, with community consultation that is not a formality. That window does not stay open indefinitely.
The question is not "Pax Silica: yes or no?"
The question is:
For whose benefit, and at what price, and who decides?
Those answers are still being written. Which means Filipinos can still insist on writing them.
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