Business group backs Pax Silica initiative

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MANILA, Philippines — Business group Management Association of the Philippines (MAP) expressed support for the Pax Silica initiative, which is expected to open the economic opportunities for the country, but cited the need for safeguards to ensure it protects national interest, the environment and creates local quality jobs.

In a statement, MAP said the Pax Silica initiative “presents a potentially transformative opportunity to accelerate industrial development, create quality jobs, develop Filipino talent and strengthen the country’s position in the global economy.”

However, it said the initiative must be accompanied by clear safeguards that ensure technology transfer, environmental sustainability, inclusive growth, Filipino capability building and the protection of national interests.

Various sectors have raised concerns on the initiative particularly, on environmental sustainability, resource utilization, community impact, economic sovereignty and the Philippines’ long-term strategic interests.

“MAP therefore supports a Proceed, but Protected approach,” it said.

Last April, the Philippines joined the United States-led Pax Silica initiative, which seeks to build a secure and resilient artificial intelligence and semiconductor supply chains.

Under the initiative, the Philippines and US are developing an AI hub in New Clark City.

MAP said the Pax Silica initiative provides an opportunity to support the country’s strategic transition to higher value economic activities from labor exports, consumption-led growth and minimally processed resources.

While the initiative has potential to create opportunities for the country to attract large-scale investments, strengthen semiconductor and AI-related capabilities and its position in global supply chains, as well as create jobs, MAP said these outcomes need to be negotiated, contractually protected and monitored.

To ensure these outcomes are achieved, MAP cited the need for safeguards.

In particular, MAP said the Philippines should ensure that the initiative contributes to domestic industrial capabilities and leads to value addition in mineral processing, component manufacturing, technology development, advanced manufacturing and research activities.

In addition, it said technology transfer and capability building need to be measurable.

It also cited the need to prioritize Filipino employment and their participation in technical, professional, supervisory and leadership roles over time.

Given concerns on the proposed hub’s water use, power demand, emissions, biodiversity and resource utilization, MAP said that strong environmental stewardship is a must.

Moreover, it said community protection and inclusive growth must be guaranteed by ensuring the benefits of the Pax Silica goes beyond investors and large corporations.

It also emphasized the need to preserve national sovereignty by ensuring all activities within Pax Silica remain fully subject to Philippine laws, regulations, taxation rules, labor standards, environmental requirements and judicial processes.

Meanwhile, Information Secretary Henry Aguda told reporters that the Pax Silica project is expected to generate at least 180,000 to as many as 500,000 jobs in the digital sector.

Aguda said Pax Silica would bolster the country’s capability on AI, and this should persuade tech giants like Amazon, Google and Meta to set up shop here.

Their investments, in turn, will spur a demand for digital talents, something the Philippines could offer through its pool of AI-ready workers, Aguda said. Further, this could mean a redirection of some workers into higher-value employment, such as in machine learning.

Aguda said he is optimistic about what Pax Silica could bring to the Philippines, even as it faces opposition from agricultural, environmental and indigenous groups.

Critics believe Pax Silica could worsen the power and water crisis in the country.

He added that data centers in Pax Silica could require between 300 and 400 megawatts (MW), a capacity that can electrify as many as 120,000 homes.