Pax Silica: Will it be good for the country, or not?

For the past few weeks, questions about Pax Silica have been brought forward. Is it really good for the Philippines? Will it bring investments and jobs as promised? What about the environment, water and electricity requirements and questions involving Philippine sovereignty?

These are definitely legitimate questions that deserve factual answers. However, we should not reject outright an opportunity before examining what it can actually bring or do. Our electronics and semiconductor industry is significant, and we have a technically capable workforce. Pax Silica presents an opportunity to move further up the value chain and not be stuck with lower-value activities because our engineers and scientists are capable of doing more.

Trade Undersecretary Perry Rodolfo described the proposed hub as a “win-win,” framing economic security in terms of improving the lives of Filipinos and increasing Philippine participation in emerging industrial supply chains. Economic analysts say Pax Silica can strengthen Philippine resilience and industrialization; it’s a manufacturing and high-technology endeavor rather than a war-driven project.

While we were one of the first to be chosen, there are those quick to speculate on the downside instead of examining the potential upside. Some concerns raised are legitimate, but quite a number of those mouthing criticisms are obviously advancing other interests, totally not serving our own.

Global interest has been growing on Pax Silica, a US-led initiative aimed at strengthening secure technology supply chains among trusted partners. The initiative reaches across core sectors that are critical to the global technology ecosystem: critical minerals, semiconductors and electronics, advanced manufacturing, artificial intelligence, computing and data infrastructure.

Launched last December, membership has since rapidly expanded to over 30 countries, with many others eager to join the initiative. The Philippines formally joined Pax Silica in April. Under the framework, the US and the Philippines plan to establish an Economic Security Zone spanning approximately 4,000 acres in New Clark City within the Luzon Economic Corridor (LEC). The proposed site is the first AI-native industrial acceleration hub under Pax Silica and will also serve as a platform for allied manufacturing. It’s an ecosystem that would connect technology companies, research institutions and government agencies, and attract high-value investments.

The initiative is important because the world economy is going through a massive transformation, shifting away from traditional globalization to a model that is focused on the twin objectives of national and economic security – essentially two sides of the same coin.

Artificial intelligence is no longer simply about computers providing smart or clever answers. AI, and the technologies surrounding it, are going to increasingly influence how factories operate, how medicines are discovered, how logistics networks function, how financial systems work and, ultimately, how competitive nations will become. Secure supplies of semiconductors, critical minerals, energy, computing capacity and advanced manufacturing are going to become matters of economic security and commercial policy.

Modern supply chains proved vulnerable during the pandemic. And with the situation in the Middle East, governments and companies are looking for reliable locations to manufacture, process, store and move critical products. The Philippines’ geographic position, longstanding alliance with the US, the LEC and a large English-speaking workforce are advantages that should not be underestimated.

However, enthusiasm for investment should never prevent us from insisting on safeguards that protect Philippine interests. We should aim for Filipino engineers designing technology, Filipino scientists conducting research, Filipino graduates working in advanced manufacturing and AI and Filipino companies eventually becoming suppliers and innovators in their own right.

Environmental concerns must be addressed directly, particularly massive requirements for water and electricity, plus questions on land use, surrounding communities and environmental protection – issues that responsible planning must solve before and during construction.

The answer is not to choose between development and environmental protection as though the Philippines can have only one. The answer is to design the project properly: identify sustainable power sources, establish credible water-management plans, require environmental compliance, protect surrounding communities and make the standards and monitoring mechanisms transparent. A project advertised as representing the technological future should also aspire to modern environmental standards.

An important point: there will be no AI and hyper-scale data centers inside New Clark City because the location does not have the required electricity supply, according to BCDA president and CEO Jake Bingcang, who disclosed that an interested AI company has chosen Malaysia instead.

Which brings to mind something I have publicly emphasized: the Philippines is not the only country capable of hosting advanced technology investment. If we “drop the ball,” there are other Asian countries ready to take it on and move quickly without hesitation. The US and allied groups may see advantages in the Philippines, but we should never assume that investments will wait forever while we go into the typical “paralysis by analysis.”

The old saying “he who hesitates is lost” brings to mind the time when we “dropped the ball” on the Pfizer vaccines at the height of the Covid-19 pandemic. We had 10 million vaccines that were coming our way, but by taking our time signing a prerequisite requirement, a non-disclosure agreement (NDA) which was so simple and could have possibly saved lives – we ended up at the end of the line.

We have been talking for decades about advancing the Philippines into a modern industrial and technological nation. Yes, we should scrutinize Pax Silica and insist on safeguards. However, the bigger danger may not be Pax Silica coming to the Philippines but watching investments, technology and jobs going elsewhere – realizing years later that we once again missed out on a significant opportunity and allowed the future to pass us by.

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