There appears to be some controversy regarding the Philippines’ involvement in Pax Silica, the United States-led initiative involving 23 other countries and the European Union (EU).
What is clear
The stated goals of Pax Silica are “reduce coercive dependencies;” “partner to secure global tech supply chains, address AI supply chain opportunities and vulnerabilities, and explore joint investment,” and; “protect sensitive technologies and build trusted digital infrastructure.”
Participating countries committed to “pursue projects to jointly address artificial intelligence (AI) supply chain opportunities and vulnerabilities in: priority critical minerals, semiconductor design, fabrication, and packaging, logistics and transportation, compute, and energy grids and power generation;” “pursue new joint ventures and strategic co-investment opportunities;” “protect sensitive technologies and critical infrastructure from undue access or control by countries of concern;” and “build trusted technology ecosystems, including ICT systems, fiber-optic cables, data centers, foundational models and applications.”
The main participation of the Philippines in Pax Silica includes the establishment of an Economic Security Zone (ESV) in New Clark City in Capas, Tarlac, located within the Luzon Economic Corridor, led by the Bases Conversion and Development Authority (BCDA).
Also included is the use of the Port of Subic Bay as the preferred maritime gateway for logistics, cargo handling, import and export operations, data integration, and other critical supply chain requirements. The use of the Clark International Airport is also part as the aviation side of the logistics.
To support the planned development, BCDA president and CEO Joshua Bingcang said the US Development Finance Corporation has approved funding for a feasibility study on a proposed liquefied natural gas terminal and a 1,200-megawatt power plant.
The Aurora Pacific Economic Zone and Freeport Authority (APECO) also plans to support the needs of the Philippines’ participation in the Pax Silica initiative via the shipment of critical minerals through its planned 500-hectare seaport in Casiguran, Aurora.
Negotiations are ongoing, and the Philippines and the United States may sign the framework deal by November 2026.
What is being teased
Over 50 firms — among them allegedly trillion-dollar tech giants — are reportedly eyeing investments in the first Pax Silica site at New Clark City, BCDA claims.
Government officials emphasize that negotiations are ongoing, but Taiwanese electronics manufacturing giant Hon Hai Technology Group (Foxconn) has been explicitly name-dropped.
The government claims that only one or two data centers are to be established in the ESV.
What is speculation
Likely because of the buzzword “AI-native”, critics assume that the locators intending to establish at the ESV are going to be data centers. Such a speculation is reinforced by statements being made by government officials like Department of Information and Communications Technology (DICT) secretary Henry Aguda, who said “[w]e’ll get a lot of investment in the area of telecoms and in the area of hyperscalers, mostly focused on the LEC. So that will create more jobs.”
Further fueling this speculation is the news that on July 8, 2026, Pres. Ferdinand R. Marcos Jr. met with executives of Amazon Web Services (AWS) to discuss the company’s proposed investment in the Philippines, including plans to establish an AWS Region that could bring up to $5 billion in investments over the next 15 years.
According to the Presidential Communications Office, the proposed investment includes the possible establishment of an AWS Region, a cluster of data centers that would provide cloud computing services directly from the Philippines. The government response is that only one or two data centers are to be established in the ESV.
Critics of the Philippines’ participation in the Pax Silica initiative also raise concerns such as water scarcity for communities at or near data center campuses, as data centers use significant amounts of water for the cooling of equipment.
In a similar vein, critics similarly raise concerns about water use by electronics manufacturing firms planning to set up shop in the ESV; the use of water in electronics manufacturing is likewise significant in volume.
Evaluating the criticisms of PH participation in Pax Silica and proposing solutions
- Energy Consumption
The projected electricity demand of the ESV could reach at least 5 gigawatts (at least 5,000 megawatts), according to Bingcang in a roundtable discussion in June 2026.
Addressing the concerns over excessive energy consumption, the DTI said there will be additional renewable energy facilities to generate power for the project. It will not use existing power capacities, according to Department of Trade and Industry undersecretary for industry development, trade and investment promotions Ceferino Rodolfo.
To support the planned development, Bingcang said the US Development Finance Corporation has approved funding for a feasibility study on a proposed liquefied natural gas terminal and a 1,200-megawatt power plant.
Also, ACWA Power, a Saudi Arabian renewable energy developer has partnered with the BCDA to build a 500-megawatt solar plant to support the hub’s power requirements.
This additional 1,700 megawatts, however, is still far short of the projected electricity demand of the ESV of at least 5,000 megawatts. The power must come from somewhere, and that demand will likely have to be supplied by the Luzon grid.
The Luzon Grid has an available generating capacity of 17,097 megawatts, addressing a system peak demand of 12,249 megawatts. The operating margin is 4,848 megawatts.
With the additional 1,700-megawatt supply for the ESV and the additional 5,000-megawatt demand from the ESV, there will be theoretically a 1,548-megawatt operating margin for the Luzon grid. This is a dangerously low operating margin, and it is not unreasonable for people to fear the specter of rotational brownouts and electricity price spikes.
Furthermore, as electricity demand increases without significant parallel increases in electricity supply, electricity price increases could very well be the norm rather than only sporadic spikes.
To address that, the United States Trade and Development Agency (USTDA) will fund a $2.7-million feasibility study to help Meralco PowerGen Corp. (MGEN) assess and deploy US-designed small modular reactors (SMRs) in the Philippines.
SMRs are nuclear reactors with a power output ranging from 10 to 300 megawatts per module, meaning that to address the 5,000 megawatt demand and ensure that the ESV will not draw from existing power capacities at least 10 to 15 top-end SMRs should be deployed.
This does not, however, cover the need to build other power plants to supply the normal and continually growing demand for electricity, projected to rise by 5.5% annually, and whose costs are currently the highest in the region.
Furthermore, the climate change-spurred transition away from fossil fuel power plants, particularly coal plants, means that the Philippines should not only start discussions about other power sources such as offshore wind and baseload nuclear but already start and fast-track implementation.
The Philippine energy mix and production capacity should be rapidly widened if the success of the Philippines’ participation in Pax Silica is to be pursued; without energy, the energy-hungry beast will die, or will consume the Filipino people instead as sacrifice.
- Water Use
Water consumption by the ESV is a valid concern. Water use by industrial zones are significant, so much so that the Philippine Economic Zone Authority (PEZA) requires the monitoring of water consumption and wastewater discharge.
In a statement, National Water Resources Board (NWRB) executive director Sevilla D. David Jr. confirmed that the water resources within the project area are sufficient to meet the total water demand of the proposed project without adversely affecting the local water supply.
Department of Defense secretary Gilberto Teodoro Jr. on July 20, 2026 brushed aside concerns that the proposed Philippines-United States Pax Silica project could worsen water supply in host communities, saying no major industrial project would be approved without a sustainable water management system.
Bingcang assured the public that the participation of the Philippines in the Pax Silica initiative will comply with environmental standards and will not consume community water; water for the ESV will come from surface water harvesting, storage, treatment and recycling.
The third statement seems to be the most cavalier and unrealistic. Even at 100% efficiency of the surface water harvesting (i.e., rainwater harvesting) from rainwater that will fall on the 1,619-hectare area, only 20 million cubic meters of water can be collected annually. That would average out to less than 55,000 cubic meters available for daily consumption by multiple factories and data centers.
A semiconductor fab can consume tens of thousands of cubic meters of water per day. The largest use of water (about 75%) in a fab is process-related, with much of that being converted to ultra-pure water (UPW) needed for production itself. About 25% to 80% of input water is lost as waste when producing UPW; if this water is not reclaimed, it is lost to municipal sewage.
A data center is likewise a heavy user of water, consuming about 20,000 cubic meters per day, primarily for the cooling of electronic equipment. The cooling of electronic equipment in a data center is essential to data center operation; elevated temperatures slow equipment down or force shutdowns, while repeated exposure to heat damages hardware and leads to more maintenance.
To put these numbers in context, a cubic meter of water can support six to ten persons for a day. A single factory can consume water that hundreds of thousands of persons need for daily use; a single 1 MW data center could consume the same amount of water or more.
There is a need to establish “human first, machine last” water use prioritization policies; i.e., regulators should ensure that there is water available for local communities and population centers before considering the water supply that can be made available to the ESV.
There are possible solutions already available and need not be invented.
For both electronics manufacturing companies and data centers, it is imperative for regulators to encourage if not mandate water reclamation. Reclaimed water can readily be made potable water useful for human consumption and is not a new technology; Singapore has been doing so since 2002.
For data centers, however, particularly for closed loop cooling systems, the consumed water is not immediately discharged to reclamation facilities or sewage systems; instead, the water stays within the data center cooling system until discharged during maintenance cycles and is only periodically replenished. This does not remove the need for cooling water totally; cooling water use is only mitigated.
Data center cooling technologies are moving towards water consumption reduction. As such, the government should issue policies prioritizing water consumption reduction.
With current levels of water used by “ordinary” data centers up to AI data centers being about 24 to 125 cubic meters of water per megawatt per day (a consumption volume that could support up to 1,200 persons in a day), the government can be proactive and set “carrot and stick” and “human first, machine last” water consumption reduction policies.
For example, the National Water Resources Board (NWRB) can set a consumption cap of 10 cubic meters per megawatt of data center capacity, exceeding which will result to a fine per cubic meter exceeded.
The fine per cubic meter of excess consumption must be more expensive than alternative technologies that do not use water, such as dry cooling, dielectric liquid cooling, among others, so that data centers will use these technologies instead of treating the fine as the cost of doing business and defaulting to water cooling.
These caps should be sufficient low and the fines also be high enough that even closed-loop water cooling systems will be made more expensive than alternative technologies that do not use water, because in a closed-loop system, water still must be loaded at least once, and again during maintenance cycles after draining.
To ensure that even locally established data centers will also transition to technologies using less water, existing data centers in the Philippines should be given a transition timeline to retrofit their infrastructure as necessary.
For example, existing data centers can be made exempt from the fines from years 1 to 3 from the effectivity of the policy, are fined only at 50% of the fine in years 4 to 6, 75% of the fine in years 7 to 9, and are fully liable only at year 10 and onwards.
To further ensure that the implementation of water-saving and non-water-cooling technologies will be encouraged, the government can provide incentives, such as VAT exemption, for the purchase, installation, and maintenance of these technologies.
Finally, “human first, machine last” water consumption reduction policies can make industrial use more expensive per cubic meter than household use; i.e., pricing must be different and household use must be cheaper.
- Land Use and Displacement of Communities
Critics of the Philippines’ participation in the Pax Silica initiative claim that this will result in the displacement of communities, that people will be moved out from land that they are currently residing in. The government denies this, saying that the project site of the ESV does not have residents in them to be displaced.
Even if the government’s denial is valid, industrial zones are by nature large parcels of land, and as the Philippines is not a country that has a lot of land that can be allocated without sacrificing the needs of communities, such as living space and agricultural industries, there should be some measure of prudence in the use of land.
The campuses of electronics manufacturing factories are by their very nature sprawling. A single factory can occupy tens of hectares of land. For example, Foxconn’s new factory in Bac Giang province, Vietnam, is sited on a plot of land that is 50.5 hectares wide.
To mitigate sprawl, the government should find means to encourage the decentralization of locator companies’ factory sites. Underutilized PEZA sites should be made priority for locating such sites.
For data centers, there are more options to mitigate sprawl. Data centers do not have to use large parcels of land; high-rise data centers have already been built.
In terms of government policy, Singapore’s Infocomm Media Development Authority (IMDA) signed a Memorandum of Intent (MOI) with Huawei International and Keppel Data Centers to explore the technical feasibility of a high-rise green data center building, more than 20 storeys high.
The BCDA can do the same and set targets and incentives for high rise data center facilities instead of sprawling campuses. Regulators could also explore the establishment of policies incentivizing minimal land use.
- Noise and Neighbors
Another criticism of the Philippines’ participation in the Pax Silica initiative is the claim of noise pollution. Kalikasan said the ESV could also cause noise pollution, which could disturb local wildlife such as birds. BCDA’s Bingcang countered this, saying, “Lahat po ng projects namin kumukuha ng ECC (Environmental Compliance Certificate). We will comply, for sustainability. Compliant kami sa environmental regulations.”
This is not a completely invalid criticism, if — and it must be stressed, IF — the government allows locators in the ESV to use old and noisy technologies and machinery, and does not implement existing noise control laws and regulations.
Noise control is an issue that has been in place for decades. The Civil Code of the Philippines in Articles 682 and 694 provided guidance for nuisances, such as noise, as far back as 1949.
The Clean Air Act, Republic Act No. 8749, effective since 1999, classifies “emissions” as “any air contaminant, pollutant, gas stream or unwanted sound from a known source which is passed into the atmosphere,” and thus is used to control noise pollution. This is likewise not new, as Presidential Decree No. 1152 s. 1977 already prescribed noise control in 1977.
Kalikasan’s criticism will not be unfounded if regulators do not implement strict noise controls.
The Biodiversity Conservation Society of the Philippines made a claim on a Facebook post that “(d)ata centers require all-night light that disrupts the natural rhythms of the body, including melatoning production that regulates sleep and wake cycles. It can also disrupt migration patterns of birds, butterflies, and bats, among others.”
This is a patently false claim, an outright piece of malinformation. Data centers do not require light to operate; lights are turned on only if maintenance workers need to do work in the data center floors, and only in the areas where work is being done by humans. Lights are not required during normal data center operations; in fact, lights are usually turned off as an energy-saving measure.
- Employment vis-à-vis Technology and AI Value Chains
Another criticism is that the Philippines’ participation in the Pax Silica initiative is that Filipino labor comes at a cheap cost in favor of foreign interests that are just enough to get workers by.
The criticism is based on the Philippines electronics manufacturing industry specializing in manufacturing assembly, testing, packaging, and distribution without the inclusion of activities higher in the value chain such as research and development (R&D), design and development, and wafer fabrication, despite the fragmentation of the supply chain into multiple countries and regions still resulting in well-integrated regional and global production networks.
The criticism is not invalid. When Intel left the Philippines in 2009, Intel did not leave a cohort of Filipino engineers and technicians that could independently perform R&D and design and development, that could apply their talent and technology transfer and perform electronics manufacturing activities higher in the value chain.
To address this concern, the Pax Silica initiative is launching “Foundry School,” a workforce development initiative built in partnership with Stanford University to equip entrepreneurs, engineers, and advanced manufacturing leaders across Pax Silica economies.
Foundry School will kick off with a seminar series at Stanford, gathering founders and CEOs in advanced manufacturing to teach the principles behind the world’s most successful industrial enterprises. This series will be paired with a first-of-its-kind advanced manufacturing curriculum, jointly developed by Stanford and the State Department, that educational institutions across Pax Silica economies can adopt and deliver in their own classrooms.
In response, the BCDA is coordinating with the University of the Philippines (UP), the Technical Education and Skills Development Authority (TESDA), and Stanford University to help develop AI talent and workforce programs.
The DTI embedded in the Philippine Semiconductor and Electronics Industry Roadmap, first unveiled by the Department of Trade and Industry (DTI) in 2025, a five-year workforce plan to train and upskill 128,000 semiconductor professionals.
All this said, it remains to be seen if the Philippines’ participation in Pax Silica moves the Philippine manufacturing sector up the electronics manufacturing value chain. Whether or not the related criticisms of the critics of the Philippines’ participation in Pax Silica are true remain to be speculation at this point.
- Mineral Extraction, Processing, and Community Equity
Criticism of the Philippines’ participation in the Pax Silica initiative also involves mineral extraction, processing, and community equity.
The Philippines mining sector has often been subject to criticisms — both valid and invalid — and the Philippines’ participation in the Pax Silica initiative does provide a convenient segue into the amplification of these. But are these criticisms relevant to Philippines’ participation in the Pax Silica initiative?
Critics particularly mention nickel, cobalt, chromite, and copper. Going through the data, the Philippines is a major contributor to the global mining industry through the mining of nickel (second largest global producer, 11% of global nickel ore production) and cobalt (seventh largest global producer, 2% of global cobalt ore production); the Philippines is not a major contributor for chromite (6th largest reserves, less than 1% share in global output), nor for copper (4th largest reserves, less than 1% share in global output).
While these minerals are essential in semiconductor and electronics manufacturing, critics miss the degree of involvement of these minerals in semiconductor and electronics manufacturing.
Seventy percent of global nickel production goes to the production of stainless steel and only about 5% of global nickel production goes specifically to electronics components.
Seventy percent of global cobalt production goes to battery technology production, particularly for electric vehicles (EVs), and only a small fraction goes to semiconductor and electronics manufacturing (less than 5%), mainly the production of magnets.
Between approximately 75% to 80% of chromite ore production is consumed by the stainless steel and ferrochrome industries, and only less than 5% of total global chromite consumption goes to semiconductor and electronics manufacturing. Electrical and electronics applications represent approximately 29% of total global copper market consumption.
Meanwhile, silicon accounts for 95% of the semiconductor and electronics manufacturing industry, and the Philippines is not a producer of this mineral. Major producers of silicon are China (about 70% of global silicon production), Russia (about 10%), United States (about 5%), Brazil (about 5%), and Norway (about 5%).
The semiconductor and electronics manufacturing industry also accounts for about 35% of the demand for rare earth elements (REE) production; the Philippines is not a contributor to global REE production, with the main contributors being China (70%), United States (14%), Australia (6%), Myanmar (4%), India (1%), Madagascar (0.3%).
If mineral extraction is to be an issue to be tied to the Philippines’ participation in Pax Silica, the issue should be centered on the import of minerals for processing in the locators of the ESV, if any are to be established.
The Philippines’ participation in Pax Silica will not significantly impact the current issues in the Philippine mining industry, and the issues of mineral extraction vis-à-vis Pax Silica is a red herring at best.
- Dual-Use Technologies Manufacturing and Prepositioning
Members of the Makabayan bloc oppose the Philippines’ participation in the Pax Silica initiative, saying “we stress that this is fundamentally about war production, not neutral industrial development. Pax Silica is the production aspect, while the US-Philippines critical minerals framework is the foundation.”
The Makabayan bloc may not be completely wrong, but the argument is specious, if not ridiculous.
Dual-use items are goods, software and technology that can be used for both civilian and military applications. For example, a commercial drone made in China providing videos used by Bulatlat to report on the effects of a typhoon can be the same type of surveillance drone that has been used by Ukrainian forces in defense against the Russian incursion.
The iPhone used by the Makabayan bloc to livestream their press conferences about the ongoing impeachment trial is the same (if not better than) the iPhone used by the artillery units of the US Army to calculate ballistic trajectories.
Ruggedized versions of general-purpose graphics processing unit (GPGPU) cards used for medical imaging devices are those used for artificial intelligence, sensor processing, radar control, signal processing and video analytics in military systems.
The issue of dual-use manufacturing and pre-positioning is a ship that has already sailed. Practically any product of the semiconductor and electronics manufacturing industry can be used for either civilian or military purposes.
There are no longer any technologies built by the semiconductor and electronics manufacturing industry that are completely civilian in nature and have not been used for military purposes, nor any military technologies that have not been ported to civilian purposes.
- Facts matter; speculation shouldn’t
The Philippines’ participation in the Pax Silica initiative is controversial and currently being debated – and rightly so. Initiatives this large-scale that have potential far-reaching effects into the daily lives of ordinary Filipinos should be argued by all sides, sifting the good from the bad, the useful from the undermining.
That said, the debates should be based on facts; if the debates must involve speculation, speculation must be prudently done and anchored at least on the best facts available.
The reportage on these debates should also not be limited to “he said, she said” statements. The corps of journalists should do deep dives into the arguments being made by all sides of the debate and provide context to better inform the Filipino public.
With a better-informed public will come better decisions whether or not to support the administration’s push for the Philippines’ participation in the Pax Silica initiative and drive the establishment of the necessary guardrails and regulations if the initiative is to push through.
A badly informed public will create a space for misinformation, disinformation, and malinformation. Such a public will be ripe for foreign information manipulation and interference (FIMI).
Countries strongly opposing the Pax Silica initiative will likely use FIMI on a malinformed Filipino public and use the Philippines as a stalking horse for their interests.
If Filipino journalists do not report on the Philippines’ participation in the Pax Silica initiative fairly and factually, emphasizing facts and cautioning on speculation, then our own press corps will have contributed to the malinformation trap.
Let’s not contribute to that.
The author is a professional electronics engineer and multirole manager of over 20 years of experience and is an information and communications technology (ICT) rights, governance, development, policy, and security advocate for more than a decade. He is a co-founder and co-convenor of the ICT rights, governance, development, and security advocacy group Democracy.Net.PH.
