Pubmat by Adrianne Coloma

by Tandang Sora

For decades, developing countries have occupied the lowest positions in global value chains — exporting raw materials, importing finished products, and shouldering environmental burdens. The 2020s’ AI boom, and with it, the need for technological infrastructure, offers a rare opportunity for the Philippines to pursue a position in the international AI economy. Yet, while integration into Pax Silica may promise technical acceleration, it does not defend against the risk that the country’s resources may become subject to foreign interests: that which may come at the expense of national sovereignty.

Late 2025 saw the establishment of the Pax Silica initiative, aimed at forming international supply chains supporting AI infrastructure. Led by the US alongside other founding nations from the Global North, it has since sought signatories — some of which include countries such as Finland, South Korea, and Israel — that have committed to forming more resilient AI supply chains. In doing so, it aims to counter China’s dominance over artificial intelligence supply chains. However, while the initiative is framed in this way, it does not guarantee that member states all benefit equally; without any concrete guarantee, countries in the Global South such as the Philippines may remain meager providers of minerals and labor.

But what, exactly, is the Philippines’ role in this coalition? DTI Undersecretary Ceferino Rodolfo stated that some of the countries’ major contributions include its natural resources, strategic location, and existing position in the AI supply chain. The Philippines possesses significant reserves of minerals essential to electronics manufacturing such as copper, nickel, and gold. Moreover, its proximity to Indo-Pacific trade routes and its established electronic export industry make it a lucrative link in AI supply chains. However, these same advantages make the Philippines that much more vulnerable geopolitically. The country runs the risk of only remaining valuable for what it can supply to global superpowers, left once again in the lower rungs of the value chain.

In advancing this partnership, the US and the Philippines have jointly announced their plan to transform a 4,000-acre area in New Clark City, Tarlac, into a so-called “industrial hub” called Golden Node. In this regard, the Philippines aims to benefit through greater development and investment into high-value manufacturing and technology transfer, expanding current domestic capabilities that could position the nation as more than a source of raw materials or low-value assembly work within the AI economy. Now, it is only a question of whether or not this vision materializes, especially without a binding assurance for industrial capacity-building.

It is true that the Philippines should be forward-looking in the pursuit of technological and economic development, especially in this decade’s evolving AI landscape. The Pax Silica initiative as a whole, however, has garnered a considerable amount of controversy, with a petition published by Katipunan Student Movement (KASAMA) having garnered over 270,000 signatures as of the making of this article. But is Pax Silica truly beneficial for the nation in the way that it promises? 

It seeks to provide the country a “pathway to gradually expand into higher-value segments of the value chain over time,” but what type of scrutiny does this opportunity invite? With no enforceable guarantees for technology transfer, value creation, or domestic capacity-building, Pax Silica risks placing the Philippines where it has always been: as a catalyst for foreign whims, subject to the drain of national resources and the exacerbation of environmental stress.

Up the Value Chain

According to the Philippine government, Pax Silica represents an opportunity for the country to position itself in the international AI economy. The initiative itself has the potential to bring ₱180 billion in total revenue per year, further strengthening the country’s role in global AI supply chains. Beyond that, it is projected to contribute heavily to the IT-BPM sector in the Philippines, creating up to 190,000 jobs. 

In the words of Joshua Bingcang, president of the Bases Conversion and Development Authority (BCDA), this is especially important because of its potential to turn the country’s propensity for “brain drain” into “brain gain” — so to say, to utilize the technical professionals in the country whose work ends up getting outsourced abroad. Being able to take advantage of local talent in the Philippines would create a stronger domestic ecosystem in support of long-term technological development. Especially after the projected low outlook of the IT-BPM industry this year, the growth of such opportunities can prove to be a much-needed boost for the technological sector of the Philippines. 

Moreover, the idea of materials being processed locally instead of internationally addresses a long-standing issue for the Philippines. As a country in the Global South, it is often positioned at the lower end of global value chains. Allowing the country to capture more value through local manufacturing may prove to be a valuable opportunity. This is aligned with previous agreements made by the DENR and the USA concerning the “advance Philippine economic policy away from the export of raw mineral ores toward increased domestic processing and value addition, supporting the country’s integration into global supply chains.”

These projections, however, should be interpreted with caution. Economic developments such as job creation and locally processed resources are significant, though they don’t necessarily indicate or promise that the Philippines will enter higher-value stages of the supply chain. Whether or not Pax Silica will facilitate this transition remains uncertain. Thus, while these projections are optimistic, they are not complete markers of success. 

Mounting Unrest

Since its announcement, the initiative has faced major backlash from various advocacy groups in the Philippines, many of whom argue that it prioritizes foreign interests over local ones.

“They expose a single pattern of U.S. imperialist intervention enabled by a government willing to surrender our sovereignty. Our lands are opened for extraction, our territories for militarization, and our communities for toxic dumping, while ordinary Filipinos are made to suffer for conflicts that do not serve their aspirations for land, livelihood, and genuine sovereignty.”

These words, uttered by Cathleen de Guzman of Kalikasan PNE, serve as only a fraction of the backlash that the Philippines’s participation in Pax Silica has generated. The criticism spans a wide berth — over allegations of stolen land, environmental detriment, and sovereign infringement. Taken together, they reflect an evident concern: that locals will be the ones to suffer for benefits accruing overseas. Among the ecological concerns raised are the potential strain on electricity grids, excessive water consumption, noise pollution, mineral consumption, and possible disruptions to agriculture due to industrial land use.

Aside from these concerns, many have spoken up on the potential displacement of a number of populations. Last July 14, over 3,000 indigenous Aeta residents marched in Tarlac to protest the government’s alleged land grabbing of ancestral lands. While Bingcang has stated that there is no legal ancestral domain in that area, it remains that achieving certificates of ancestral domain titles is notoriously difficult, with some pending cases having been open since 1999. Whether or not these two facts are connected remains unclear; however, what is unmistakable is that large-scale industrial projects seem free to proceed even alongside unresolved disputes over ancestral land rights.

Environmentalist Paulo Burro said, “With the drive to consolidate the supply chain, there may be increased mineral demand… questions remain around its actual economic impact on displaced farmers and fisherfolk.” In response to this, Palace Press Officer Claire Castro replied, “Kung mayroon man na madi-displace na mga farmers sisiguraduhin po ng gobyerno na hindi po sila mawawalan ng kanilang pagkakakitaan… Pero sa ngayon po ay wala pa pong nakikita pong ganiyan.” Overall, the Philippine government maintains that no displacement, whether of indigenous people or farmers, will occur.

More pressingly, the potentially threatened sovereignty of the Philippines has dominated much of the public discourse regarding Pax Silica. In its opposition to the project, militant group Bagong Alyansang Makabayan (BAYAN) warned that the Philippines risks becoming a “forward operating base in an economic and technological war” waged by the United States against China. Similarly, Kilusang Magbubukid ng Pilipinas (KMP) denounced the project as a “massive sellout” of the country’s resources, arguing that the government is doing so to serve foreign interests. In response, Castro rejected these concerns, reiterating the president’s words that “we will not surrender even a square inch of our territory to any foreign power.”

Caveats Behind the Promise

Beyond the extraction of critical minerals, the AI infrastructure of the Golden Node carries many of its own environmental costs. Data centers are among the most energy-intensive facilities, requiring a constant supply of electricity for their systems and water for their cooling. As the Philippines already experiences recurring brownouts in several regions, the addition of large-scale AI infrastructure could place even more stress on the nation’s strained power grid. On this end, the government has started conducting feasibility studies on alternative power sources (namely, a liquefied natural gas terminal and a 1,200-megawatt power plant), though these plans are yet to be concretized.

Water use is another area of concern. As AI data centers’ use of water threatens the climate, with the Philippines as one of the most vulnerable countries to global warming, use of water-intensive cooling systems may have a detrimental impact on the environment. At present, project proponents of the Golden Node are yet to release the technical specifications (such as the type of cooling system, the water consumption of which varies greatly) to make an accurate assessment of expected water demand. Regarding the source of this water, the project will not tap into existing reservoirs — instead, the current project design is to collect and utilize rainwater to power cooling systems. Whether or not the final infrastructure can reliably meet the per-day demand of 65 to 90 million liters of water, particularly during the nation’s dry periods, will hinge on the project implementation.

These environmental concerns are particularly relevant as they raise the question: Who, exactly, does the Pax Silica initiative benefit? If industrial development comes at the burden of public utilities and natural resources, then local communities may end up shouldering the cost of innovation. Moreover, the absence of technical specifications available to the public reveals a lack of transparency that makes it difficult to assess any environmental assurance that the proprietors of the project make.

The more daunting question surrounding Pax Silica is whether it will genuinely strengthen the Philippines or simply place it within another foreign-led supply chain. Recalling the country’s colonial history, with the US having previously acquired it for its naval position and natural resources, this situation is heavily reminiscent of the same sentiments. Moreover, while the initiative is framed as a pathway to higher-value manufacturing, the agreement itself is non-binding. With this, there is nothing to say that these promises will be realized; in fact, critics say that developing economies like the Philippines may end up being confined to the low end of the supply chain. 

This distinction matters, as it represents the confines that the government is trying to leave behind — that of back-end semiconductor manufacturing, significant but altogether lower-margin. Without binding mechanisms for the country’s industrial capacity, it risks being sidelined in terms of technological development, failing to promote the country’s position in the AI value chain to any meaningful extent. Furthermore, as Pax Silica emerges alongside another manifestation of the infamous US-China rivalry, the Philippines must ensure that it does not become a frontline state in the midst of these countries’ competition.

While Pax Silica presents itself as a rare opportunity for a developing economy such as the Philippines, it should not be evaluated at face value. Promises of innovation remain just that — promises, and without any concrete framework to guide them. Whether Pax Silica succeeds or not depends on how the Philippines can manage to uplift its industrial growth, natural resources, and local communities all at the same time. What remains now is the principle of how, and for whom, this development unfolds within the country.