As a newly minted member of a Washington-led technology alliance, the Philippines is moving forward with plans to build one of its most ambitious economic projects to date — a 1,619-hectare artificial intelligence and semiconductor hub inside New Clark City in Capas, Tarlac, anchored by $10 billion in starting investment and a framework agreement targeted for completion by November 2026.
The project, confirmed by several Philippine government agencies, would place the country at the center of a global push to secure supply chains for semiconductors, critical minerals, and AI infrastructure — though key details on environmental sustainability, displaced communities, and governance terms remain publicly unsettled.
The Alliance Behind the Project
Pax Silica is a US-led international technology coalition formally launched on December 12, 2025, at a Washington, D.C. summit convened by US Under Secretary of State for Economic Affairs Jacob Helberg. According to the alliance's founding documents, its core mission is to build secure and trusted supply chains among allied nations and reduce collective dependence on China, which controls an estimated 90 percent of the world's rare earth refining capacity.
The Philippines became a signatory in April 2026, when Trade Undersecretary Ceferino Rodolfo signed the coalition's declaration on behalf of the country — making it the 13th nation to formally join. Fellow members include Japan, South Korea, Australia, India, Israel, Singapore, the United Kingdom, the Netherlands, and the European Union. The total number of signatories, however, remains in dispute: the US State Department lists 23 member countries, while Bases Conversion and Development Authority (BCDA) president Joshua Bingcang has stated that the coalition has 35 members.
The declaration itself is explicitly non-binding, consisting of a two-page document with no enforcement mechanism. Binding commitments are expected to be formalized through a framework agreement currently being negotiated between the parties.
What Is Being Built and Where
The planned Economic Security Zone will occupy 1,619 hectares of government-owned land administered by the BCDA within New Clark City, a state-developed urban center in Capas, Tarlac. According to BCDA, the zone is designed to house semiconductor assembly, testing and packaging operations, electronics manufacturing, AI data centers, research and development facilities, and mineral processing infrastructure.
Finance Secretary Frederick Go has identified Taiwan-headquartered Foxconn — the world's largest electronics manufacturer and a primary supplier for Apple — as the project's anchor investor. The BCDA has also disclosed that more than 30 companies have already submitted letters of interest to participate in the zone.
Investment Scale and Job Forecasts
According to BCDA figures, the hub requires approximately $10 billion in initial capital investment, with projections reaching $40 billion to $70 billion once fully operational. The authority further projects ₱68 billion in annual tax revenues, ₱60 billion in government lease income accumulated over 25 years, and an export potential of $200 billion at full buildout.
On employment, the BCDA's official estimate covers 130,000 to 190,000 direct jobs and between 500,000 and 800,000 indirect or induced positions — figures that form the basis of the "up to one million jobs" claim cited in Malacañang briefings. Critics have noted, however, that the methodology supporting these projections has not been made public.
Environmental Concerns and Water Supply Questions
Environmental group Kalikasan has raised alarms over the project's potential water consumption, warning that a hub of this scale could use millions of gallons daily through evaporative cooling systems — placing it in direct competition with surrounding farms and communities. The group has also cited signs of strain in the Sacobia watershed, New Clark City's primary water source, since 2020.
In response, the BCDA stated that the hub will draw primarily from harvested rainwater collected through impounding facilities rather than groundwater extraction, and that a Department of Environment and Natural Resources certification confirming a sustainable water supply will be required before the project proceeds. No detailed technical plan has been publicly released, however, leaving both the official assurance and the environmental warning resting on unverified projections.
Displacement: A Contested Count
Kalikasan and allied advocacy groups estimate that the project could displace as many as 20,000 residents and 15,000 farmers, including members of Aeta indigenous communities. The BCDA has rejected these figures, asserting that the designated site is titled public land with no ancestral domain claim and that only approximately 10 farmers are directly affected, for whom a livelihood program and urban farming component have already been prepared.
Farmers in Capas have told reporters they are already being asked to relocate. Aeta advocates, meanwhile, argue that the absence of formal ancestral domain titles reflects decades of denied legal recognition rather than the absence of actual communities. Neither side has released a verifiable household census, making this the most contested factual dispute surrounding the project.
Power Capacity and Governance Concerns
The zone is planned to have a dedicated power capacity of at least 1,200 megawatts. Funding support is being sought through the US Development Finance Corporation's $205-billion investment program, which includes an approved feasibility study for a liquefied natural gas terminal and accompanying power plant — addressing what officials acknowledge is a genuine constraint, given that the Philippines has some of the highest electricity costs in Southeast Asia.
On the question of sovereignty, Philippine officials have stated publicly that the zone will operate under Philippine law and that no arrangement will place it outside local jurisdiction. The US Embassy, however, has described the project as involving "shared governance responsibilities" — language that the framework agreement will need to formally resolve before any binding signing takes place.
Congressional Scrutiny and the November Deadline
The framework agreement is targeted for signing in November 2026 during the ASEAN Summit in Manila, an event that US President Donald Trump is expected to attend. The Makabayan bloc has filed House Resolution 1128 calling for a congressional inquiry into the agreement, and petition campaigns opposing its signing are currently circulating.
As of July 2026, confirmed facts include the investment figures, the identified anchor investor, the November signing timeline, and the designated site in Tarlac. Still unresolved and unpublished are the water sustainability plan, the methodology behind employment projections, a verified count of affected households, and the final governance framework between Manila and Washington.
By the Numbers
- 1,619 hectares — area of the planned Economic Security Zone inside New Clark City
- $10 billion — initial investment required to launch the hub
- $40–$70 billion — projected total investment at full operational capacity
- ₱68 billion — projected annual tax revenues at full buildout
- ₱60 billion — projected government lease income over a 25-year period
- $200 billion — projected export potential at full buildout
- 130,000–190,000 — direct jobs projected by the BCDA
- 500,000–800,000 — indirect or induced jobs projected by the BCDA
- 1,200 megawatts — minimum dedicated power capacity planned for the zone
- 90 percent — China's estimated share of global rare earth refining, per alliance documents
- 30+ — companies that have submitted letters of interest to the BCDA
- 13th — the Philippines' position as a Pax Silica signatory, joining in April 2026
Why This Matters
The Pax Silica membership and the planned Economic Security Zone represent the Philippines' deepest formal integration yet into global semiconductor and AI supply chain politics — a strategic pivot with major implications for trade, foreign investment, and national sovereignty. At stake are tens of billions of dollars in projected economic output, hundreds of thousands of potential jobs, and binding governance arrangements whose final terms have yet to be publicly disclosed. How the government resolves the open disputes over water sustainability, displaced communities, and shared jurisdiction will determine whether the project's stated benefits materialize — or become flashpoints for prolonged legal and civil conflict.
Source: Originally reported by Rappler / wire reports