Pax Silica: BCDA’s claims and the counterarguments

MANILA, Philippines – The Marcos Jr. administration has pitched Pax Silica as a great opportunity to transform the Philippines into a hub for artificial intelligence, semiconductor manufacturing, and advanced industries. The proposed 1,620-hectare industrial development in New Clark City is expected to attract up to US$70 billion in investments, create as many as 190,000 direct jobs, and strengthen the country’s role in global technology supply chains, according to Bases Conversion and Development Authority president and CEO Joshua Bingcang in a Palace press briefing. But the project has also drawn criticism from scientists, environmental groups, and farmer organizations, who question whether the Philippines will receive the long-term economic benefits being promised, or instead shoulder much of the environmental and resource costs. Here’s a look at the competing claims: Claim: Pax Silica will move the Philippines up the value chain from mineral exporter to processor Bingcang said Pax Silica aims to end the country’s long-standing role as a mere exporter of raw critical minerals. Instead, the project seeks to process those minerals locally and eventually manufacture higher-value products used in semiconductors, robotics, medical devices, and artificial intelligence. Bingcang also emphasized that Pax Silica is “not just a data center” but an industrial ecosystem focused on manufacturing, research and development, and clean industries. Critics say: The Philippines may remain at the bottom of the value chain For AGHAM spokesperson Giovanni Tapang, the project has yet to demonstrate how that transition will happen. Tapang, in a GMA interview, argued that no public agreement has required investors to transfer technology or manufacturing know-how to Filipinos. Without those commitments, he said, foreign companies could simply process Philippine minerals while advanced semiconductor manufacturing, chip design, and AI development remain overseas. The Philippines will merely rent out land and process minerals while advanced technology (like extreme ultraviolet/EUV lithography, AI models, and computational power) remains overseas. A regularly cited example is how tech giant Intel, in 1997, opened a plant here in the Philippines, in Cavite, before shuttering it in 2009 without really developing domestic capabilities for advanced chip manufacturing in the Philippines. Claim: Pax Silica will create up to 190,000 high-quality jobs BCDA estimates the project could generate between 130,000 and 190,000 jobs. Bingcang said the project would encourage “brain gain” by creating opportunities for Filipino engineers, computer scientists, researchers, and other highly skilled workers. The BCDA is also working currently with the University of the Philippines, TESDA and Stanford University to develop local talent. Stanford has an agreement with the US government to develop AI workforce programs for participating Pax Silica countries. Critics say: Permanent employment may be much lower Tapang said those figures appear to combine temporary construction jobs with permanent operational employment. He argued that AI data centers require relatively few workers once facilities become operational. While manufacturing creates more employment than data centers, he said it remains unclear what kinds of manufacturing activities will ultimately take place inside Pax Silica. Farmer groups have also questioned whether employment gains would outweigh livelihoods potentially lost through land conversion. Economist and former Department of Finance undersecretary for fiscal policy and monitoring Cielo Magno, also raised concerns on whether the best jobs as engineers and technicians will be assigned to Filipinos, and if they will be trained for the planned factories — or whether they will be assigned to non-Filipinos. IBON said: “Thousands of temporary to indirect jobs — construction needs or contractual workers —provide no real job security nor space for union organizing. Moreover, the promised technology transfers and upskilling are dependent on the foreign company’s needs for profit maximization, not rooted in an interest in developing the Filipino economy.” Counterpoint: More optimistic is DepDev Undersecretary Rosemarie G. Edillon who believes that Pax will attract technology investments that will allow the country to retain its tech and engineering talents. Claim: Pax Silica will strengthen the Philippine semiconductor industry BCDA said semiconductors already account for more than half of Philippine exports, and believes Pax Silica could help expand the industry’s exports to $110 billion by 2030. Bingcang cited existing Clark investors such as Texas Instruments and SMK Electronics as evidence that the country already has a head start that it could build upon. Critics say: The Philippines has heard similar promises before Tapang pointed to the country’s electronics industry as a cautionary example. Multinational companies established manufacturing operations in the Philippines decades ago, he said, yet the country never acquired the capability to manufacture advanced semiconductor technologies independently after firms like Intel left. Without explicit technology-transfer provisions, he argued, Pax Silica could repeat that experience. The non-profit group IBON Foundation echoed concerns on the country’s history of being unable to industrialize after so many years: “…Decades of countless low-value-added foreign investments did not industrialize the Philippines. It did not provide high-quality tech transfers and sustain holistic worker upskilling; nor did it advance the Philippine tech industry higher in the overall supply chain. Pax Silica —with the goal of making use of the Philippines’ ATP (assembly, testing and packaging) experience — will only add more years to the count. Counterpoint: Independent director for Maharlika Investment Corporation Stephen CuUnjieng, in an ANC interview, said technology transfers could happen down the line via Pax Silica if the country can put itself on a trajectory to build the capacity for them. Claim: Environmental, energy impacts will be managed BCDA said every project inside Pax Silica will remain subject to Philippine environmental laws and environmental compliance certificate requirements. Officials said water demand will be met through rainwater harvesting, impounding systems, and dedicated infrastructure, while environmental monitoring will continue throughout the project’s development. Around 40% of the site, they said, will remain open space. BCDA estimated a 3-gigawatt power capacity demand at full development. To avoid draining the public grid or competing with residential supply, energy will be sourced from dedicated, local facilities built next to the site, including a 500-megawatt solar farm inside New Clark City with Saudi firm Aqua Power. They are also currently studying a 1.2-gigawatt liquefied natural gas plant with an American firm and evaluating wind, geothermal, and power study agreements with Korean and Japanese companies. Critics say: Major environmental questions remain unanswered Environmental organizations argued that regulatory compliance alone does not resolve concerns over biodiversity, watershed protection, agricultural land conversion, and cumulative environmental impacts. Tapang questioned whether rainwater harvesting can reliably supply the project’s estimated water demand throughout the year, and said BCDA has yet to publicly explain how wastewater generated by mineral processing would be treated and disposed of. Tapang also said the government is rushing to give away the country’s electricity resources to serve foreign interests. He cautioned that the Philippines risks facing severe power shortages. Counterpoint: Energy Secretary Sharon Garin has already said that Pax is “too dangerous” to plug into the Luzon grid, but notes there are solutions. “If it’s going to be bigger and bigger, I would rather have it on a stand-alone system where it has its own power plant, whether it’s renewable or gas,” she said. Claim: Communities will benefit from the project BCDA said indigenous peoples will not be displaced because the project site is already under BCDA jurisdiction and does not overlap with ancestral domain titles. Officials also said surrounding communities could benefit from improved infrastructure and even surplus water supplies if project systems produce excess capacity. Critics say: Local stakeholders want more information Groups said communities potentially affected by the project deserve greater consultation before agreements are finalized. In an ABS-CBN report, they said some Aeta communities in the area live in ancestral lands unrecognized by the National Commission on Indigenous Peoples. The Philippine Daily Inquirer reported that officials in Capas, Tarlac, were seeking more information about the project’s scope and potential impacts before fully assessing its implications. A Kapuso Mo Jessica Soho report found that the BCDA had offered landowners and farmers P30 per square meter, or approximately P300,000 per hectare, drawing criticism online. One farmer interviewed by the show said they love their land, and for them to sell, the buyers would have to offer the right price. Claim: Pax Silica strengthens Philippine competitiveness BCDA said the project will position the Philippines within trusted semiconductor and AI supply chains, making the country more attractive to international investors seeking alternatives in Asia. Officials said more than 30 countries are now participating in discussions related to the initiative. Critics say: The project will only serve US strategic interests Tapang acknowledged geopolitical concerns surrounding China but questioned whether Pax Silica primarily advances Philippine industrial development or just US efforts to diversify technology supply chains. He said the country should pursue its own industrial policy rather than simply aligning itself with Washington’s strategic priorities. It’s a call for the Philippines to have more agency over its industrial future rather than being beholden to a superpower. Tapang asserted, “Dapat magkaroon tayo ng tunay na sarili nating industrial policy at pag-unlad.” (We must have our own true industrial policy and development.) Without a sovereign strategy, the Philippines risks repeating historical mistakes, leaving its resources drained while advanced technology remains entirely overseas. Counterpoint: Stephen CuUnjieng argues that Pax Silica should be given a chance for its promise of industrialization, and that conversations should continue rather than outright rejection from opposing voices. He also doesn’t believe that AI data centers will be a significant part of the hub in the beginning, arguing that other states — such as AI rivals US and China — would not likely place massively expensive computing equipment needed for such facilities in another country. Claim: The project is ready to move forward BCDA hopes to finalize agreements later this year before moving into planning in 2027 and construction in 2028. Officials said consultations have been conducted and that individual projects will continue undergoing regulatory review. Critics say: Negotiations are moving faster than public disclosure Tapang pointed out that key questions about technology transfer, water, electricity, environmental impacts, and long-term economic benefits remain unresolved while negotiations continue. He said details surrounding the project continue to evolve and the public deserves greater transparency before agreements are finalized. “Nakakapagtaka actually na nire-raise natin ito ngayon pero hindi nire-raise ng ating Presidente nung sinabi niya sa SONA, at hindi nire-raise ng BCDA. Ito at mukhang gusto na nilang matuloy ito na tayo pa mismo ang magsasabi na bakit ‘nyo agad-agad na inoohan itong mga ito,” Tapang told GMA. (It is actually surprising that we are the ones raising this now, but it wasn’t raised by our President during the SONA, and the BCDA does not raise this issue either. It seems they want this to push through so quickly that we are the ones who have to ask why they immediately said yes to all of this.) The debate over Pax Silica ultimately reflects two competing visions of industrial development. BCDA argues that attracting global manufacturers and technology firms is the first step toward building a globally competitive AI and semiconductor ecosystem. Its critics do not necessarily reject industrialization itself. Instead, they argue that without stronger guarantees on technology transfer, domestic capability-building, environmental protection, and transparency, the Philippines risks repeating a familiar pattern: providing land, labor, water, and resources while higher-value technologies and profits remain elsewhere. Concerns about a lack of consultations and transparency, and perceived railroading, have further raised people’s doubts about the project. – Rappler.com