Rare earths, real estate, and the US: the facts behind the Philippines joining Pax Silica, a US-led coalition designed to counter China’s grip on the global semiconductor supply chain. On the surface, it is a trade and technology alliance about chips, rare earth minerals, and AI infrastructure. But beneath that framing, the deal touches everything the Philippines cares about most: land, jobs, minerals, and the question of who really benefits when foreign powers set up shop on Philippine soil.
What Pax Silica is, and why the Philippines joined
Pax Silica was established in December 2025 as a coalition of nine nations. The US, Japan, South Korea, Singapore, the United Kingdom, Israel, the United Arab Emirates, and Australia formed the original group. Finland, Sweden, Qatar, and India joined later. In April 2026, the Philippines became the latest signatory.
The core idea is straightforward. China controls roughly 90 percent of rare earth refining that goes into advanced chip manufacturing. In 2025, Beijing used that leverage to impose rare earth export controls in response to US tariffs. Pax Silica is the American answer: build alternative supply chains with allied nations, reduce dependence on Chinese minerals and processing, and secure the inputs that run modern computing and artificial intelligence.
“If the 20th century ran on oil and steel, the 21st century runs on compute and the minerals that feed it,” said Jacob Helberg, the US Undersecretary of State for Economic Affairs, at the group’s launch.
The Philippines brings something to the table. The country holds significant reserves of nickel, copper, chromite, and cobalt — minerals increasingly vital to global supply chains. It sits at the crossroads of the Indo-Pacific. And its semiconductor industry, while focused on assembly, testing, and packaging rather than fabrication, already accounts for over half of Philippine merchandise exports, roughly US$39.1 billion in 2024, as reported by the ASEAN Business Advisory Council.
Finance Secretary Frederick Go put it plainly in a government statement: “By joining Pax Silica, the Philippines is ensuring that our mineral resources and strategic location are not simply supporting global industries from the margins, but are actively harnessed to build the industries of the future.”
The 4,000-acre Economic Security Zone at New Clark City
The centerpiece of the Philippine involvement in Pax Silica is the plan for a 4,000-acre industrial hub at New Clark City in Tarlac, within the Luzon Economic Corridor. Under the deal, the Philippines is designating the site as an Economic Security Zone, a new model for AI-native investment acceleration hubs created under the Pax Silica Initiative.
The US Embassy Manila fact sheet, published April 16, 2026, calls it the first of its kind. The zone is intended to fuse American expertise in legal frameworks, transparent regulatory standards, and dispute resolution with the Philippines’ workforce, mineral endowments, energy resources, and strategic position.
Several details remain sparse. The joint governance framework that the two governments intend to use for long-term development has not been specified. The terms of agreement for the special zone have not been made public. That gap matters, because it is the difference between a partnership and a land grab.
The Bases Conversion and Development Authority (BCDA) has said investors under the Pax Silica umbrella may lease New Clark land for up to 99 years. The project is projected to generate over 130,000 high-quality jobs. The Department of Information and Communications Technology (DICT) has separately been pushing for Philippine data center capacity to reach 1.5 GW by 2028, which would position the country as an AI infrastructure hub within the alliance.
What the Philippines gets out of it
The official pitch is that the Philippines moves up the semiconductor value chain. Right now, the country’s chip sector is concentrated at the lower end: assembly, testing, and packaging. Pax Silica, with its promise of technology transfer and upskilling, could change that.
The Luzon Economic Corridor, which the zone sits within, is itself a coordinated, high-impact investment in transportation, energy, digital infrastructure, and advanced manufacturing.
There is also the strategic dimension. The Philippines has deepened its alliance with the United States through the Enhanced Defense Cooperation Agreement and regular joint military exercises. Pax Silica adds an economic pillar to that security architecture.
The concerns are real
Opposition to Pax Silica has come from multiple Filipino groups, and the criticisms deserve a serious hearing.
The Kilusang Magbubukid ng Pilipinas (KMP) calls it a “massive sellout” of Philippine resources. Their worry is that the country ends up in a subordinate role, exporting raw materials and performing low-value manufacturing while the higher-value technology, control, and profits stay abroad — as reported by Rappler.
The Makabayan bloc makes a related but distinct argument. They fear the integration of industrial zones with expanding US-Philippine military cooperation means civilian areas could become strategic targets in a conflict. They have called for full transparency and scrutiny over the deals.
The Computer Professionals Union (CPU) is blunt. “The Philippines will be part of a long supply chain where it keeps only an insignificantly small part of the profits and benefits to production,” they said. “There is no genuine proclamation of developing and manufacturing long-term actual innovations for Filipinos.”
Then there is the land question. New Clark City sits in Tarlac, a province with active agricultural production. A 4,000-acre zone means land conversion, potentially displacing rice and coconut farmers. The environmental angle goes deeper too. Protesters point to the likelihood of expanded mining in provinces already affected by ecological degradation, with Palawan a particular concern given its status as a biodiversity hotspot.
Historical memory also feeds the anxiety. The US military presence at Subic Bay and Clark Air Base left a legacy of environmental contamination that Filipino communities are still reckoning with. The phrase “special zone” carries echoes of those earlier arrangements, as explored by PNA.
How this plays out
The Philippines has made its choice to join Pax Silica. The economic logic is hard to dismiss: the country needs the investment, the jobs, and a seat at the table as the global chip supply chain reshuffles. But the governance framework, the land terms, and the transparency questions are the variables that will determine whether this becomes a genuine industrial transformation or a repeat of extraction dressed up as partnership.
Dr. Rene Claveria of the Ateneo de Manila University’s Environmental Science Department noted earlier this year that geological surveys from the 1970s and 1980s have already identified potential areas of rare earth elements in the Philippines, most of them in Palawan. Only 5 percent of the country’s mineral reserves have been explored, and just 3 percent are covered by mining contracts. The opportunity is enormous. So is the risk of getting the deals wrong.
The United States, Japan, and the Philippines have now convened the Luzon Economic Corridor Steering Committee to advance shared commitments. That steering committee will be the first real test of whether joint governance means shared decision-making, or shared branding with unilateral terms.
