BCDA to ink Pax Silica AI framework with US

MANILA, Philippines — The Philippine government is looking to sign a framework deal for the planned artificial intelligence (AI) industrial hub under Pax Silica with a government agency of the United States.

Trade Undersecretary Ceferino Rodolfo told reporters that the government remains optimistic that the framework deal for the Pax Silica AI industrial hub in New Clark City in Tarlac would be signed with the US in November.

He said that the Bases Conversion and Development Authority (BCDA), as owner of the proposed hub’s location, would be signing the framework deal with a US government agency.

The framework will define industries that will be located in the AI industrial hub.

The proposed 1,600-hectare hub in New Clark City will be developed under the US-led Pax Silica initiative, which aims to establish a “secure and resilient” supply chain for AI and semiconductors.

Last April, the Philippines became part of the Pax Silica initiative, which has over 20 other signatories.

Rodolfo said that locators of the planned Pax Silica AI hub would be bound by Philippine laws.

“All of them at the level of the locators will comply with Philippine laws,” he said.

While the government aims to sign the framework deal with the US by November, he said that the government wants to ensure that concerns being raised on the project are addressed and sufficient safeguards are in place.

Various groups have raised concerns on the proposed project including the high water and electricity demand, environmental impact and displacement of farmers and indigenous people.

The government said that the Pax Silica AI industrial hub would focus specifically on advanced manufacturing, semiconductors, electronics, precision engineering, automation and future high-technology industries.

Rodolfo said that locators of the proposed hub will have to secure and reuse water to support their needs.

Earlier, the government also said that no farmers will be displaced as the site has been designated as a “buildable zone” since 2019.

BCDA president and CEO Joshua Bingcang earlier said that the AI hub’s development is expected to start in 2028 and involve three phases.

He said that an initial $10 billion will be invested by foreign locators for infrastructure such as roads, water and energy to support their requirements in the AI hub.

The BCDA expects potential investments in the Pax Silica AI hub to reach between $40 billion and $70 billion at full development.

It also expects P60 billion in lease income over 25 years and P68 billion to P75 billion worth of annual tax potential.

In addition, the BCDA expects $200 billion worth of exports from the AI industrial hub at full buildout.

The project is also expected to create 130,000 to 190,000 direct jobs and 500,000 to 800,000 indirect jobs.