Pax Silica: The long road ahead

This US-led effort on artificial intelligence and supply chain security aims to advance a new economic security consensus among its allies and trusted partners.

With the participation of 24 signatory countries, including the Philippines, and non-signatory participant Taiwan, Pax Silica is supposed to be a shared commitment to advance mutual prosperity, technological progress and economic security.

The idea for the cooperation is to build a reliable supply chain in harnessing AI technology which will reorganize the world economy, and reshape global supply chains. The economic value and growth will flow through and across all levels of the global AI supply chain, creating opportunity and demand for energy, critical minerals, manufacturing, technological hardware, infrastructure and new markets.

Each country that is part of the initiative will cooperate to develop a global technology supply chain, from software applications and platforms, frontier foundation models, information connectivity and network infrastructure, compute and semiconductors, advanced manufacturing, transportation logistics, minerals refining and processing and energy. It would also tap the strength of private companies and firms as well.

Here in the Philippines, private participants, according to Carl Cruz, Globe president and chief executive officer, see an opportunity for the Philippine private sector to contribute its capabilities and expertise to the country’s efforts to strengthen its position in the global technology economy.

According to Cruz, collaboration between government and business will be important as the Philippines explores where it can participate across emerging technology industries and global supply chains.

Cruz echoes Ayala Corp. chairman Jaime Augusto Zobel de Ayala’s recent call for Philippine businesses to utilize their existing strengths and capabilities to contribute to the opportunities from the Pax Silica initiative.

Rather than wait for all the details to be defined, JAZA cited the value of the private sector starting its own conversations and identifying areas where it could potentially participate.

Sharing the same viewpoint, Cruz sees the Pax Silica as an important conversation for the country, and that the private sector should be part of it. Cruz said, “Philippine companies already bring different capabilities to the table, and there is value in looking at how these can complement the government’s efforts as the opportunities become clearer.”

The government, as outlined by Trade Undersecretary Ceferino Rodolfo, has proposed a Philippine Technology Corridor with potential nodes covering advanced manufacturing in New Clark City, integrated circuit design and innovation in Metro Manila, AI compute and cloud infrastructure in Batangas, a Pacific-facing connectivity gateway in Aurora, critical minerals in Mindanao and a potential semiconductor fabrication hub in Bulacan.

Rodolfo said that these areas would build on industries and capabilities the Philippines has already been developing. However, he acknowledged that the initiative could provide another avenue to strengthen these efforts and connect the Philippines more closely with a wider international technology ecosystem.

For Globe, the areas of fiberization, connectivity and data centers are where the company could support this evolving ecosystem. AI, cloud computing, advanced manufacturing and other technology-intensive industries depend on reliable and resilient digital infrastructure, giving telecommunications companies a natural role in supporting businesses and emerging technology hubs as plans develop.

For Cruz, “Our role is to make sure that, where connectivity is needed, we are ready to support.” Cruz added, “This is a broader national effort, and each industry will have something different to contribute. What is important at this stage is that the private sector is engaged in the conversation and looking at where it can meaningfully help.”

Globe is aware that the implementation of the Pax Silica initiative will have to require careful consideration of environmental resources and other factors. That view is shared by government officials who have similarly stressed that projects pursued under the initiative would remain subject to Philippine laws, labor standards, environmental requirements and national priorities.

Globe acknowledges that sustained dialogue among government, businesses, academe and other stakeholders can help identify where Philippine capabilities are best positioned to contribute. And for the private sector, this means staying engaged, understanding where the opportunities are emerging, and being ready to bring relevant expertise to the table.

Thus, as I see it, while the Philippine government and the private sector are eager to participate in the Pax Silica, the road to realizing the Pax Silica Initiative still has a long way to go, as has been the norm for any major development goal of our country.

I could even safely say, per my own observation as an economic journalist for the past 40 years, that a lot of economic plans for our country have trekked this long road repeatedly, and at the end, either got lost along the way, was abandoned or simply withered and has been forgotten.

In a recent economic briefing of the Asian Development Bank last month wherein it had revised downward its growth projection for our country, I asked ADB Philippine country director Andrew Jeffries about his thoughts on the economic impact of the Pax Silica on the Philippine economy.

According to Jeffries, the initiative may not have an immediate impact on the Philippine economy as investments would probably take some time to come in.

With that said, and the current state of the semiconductor which we had began during the term of former President Marcos Sr., as well as our belated and still slow AI technology development in our country, my guess is that by the time we come up with a roadmap — and with all other political, geopolitical, environmental and financial considerations — we would already be inhaling the dust of our ASEAN neighbors who even at this point are already ahead of us.