April 23, 2026
MANILA – In what is widely seen as a bid to reduce its reliance on manufacturing and technology inputs from potentially hostile governments, the United States announced plans to establish a 1,619-hectare (4,000-acre) industrial hub in the Philippines “to secure inputs vital to American and global supply chains.”
To be located within New Clark City in Tarlac, the “historic” Economic Security Zone (ESZ) has been described by US Undersecretary of State for Economic Affairs Jacob Helberg as a “new model” for “AI-native investment acceleration hubs” being developed across allied nations under the US-led Pax Silica initiative.
“The Economic Security Zone is part of a broader strategy to surge production for inputs vital to US supply chains,” the statement read, adding that “the Zone can leverage the Philippines’ geographic centrality in the Indo-Pacific, its young and technically skilled workforce, and its deepening alliance with the United States.”
The Marcos administration was eager to join Pax Silica, described as the US’ flagship AI and supply chain security alliance with several countries. Finance Secretary Frederick Go said that by joining the initiative, the Philippines is ensuring that its “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.”
Broad outline
The Philippines certainly has a lot to offer: its “significant reserves” of nickel, copper, chromite, and cobalt that are deemed “increasingly vital” to global supply chains including semiconductors, especially as the US seeks to ensure its dominance in the production of chips packed with the highest level of computing power used in artificial intelligence applications.
“If the 20th century ran on oil and steel, the 21st century runs on compute and the minerals that feed it,” Helberg said earlier.
That the Philippines possesses these critical minerals should therefore give the Marcos administration the leverage it needs to ensure that the ESZ–within the broader Luzon Economic Corridor on the western side of the Philippines–will indeed become a thriving center for job-generating manufacturing facilities and at least cost to the country.
As to how exactly the carved-out ESZ will look like is still to be determined as the pronouncements of the US and Philippine governments have merely provided the broad outline of the agreement with hardly any of the needed details to determine if the deal indeed warrants celebration.
‘Joint governance’
Questions that have to be clearly answered, for example, include exactly what kind of manufacturing facilities will be established in the corridor? Will they all be American or can other foreign investors likewise establish a foothold in the zone that should be firmly established as under the sole and ultimate control of the Philippines?
There is also a need to clarify the implications of “joint governance.” The legal and operating conditions that will govern the zone should be explicitly spelled out as these may run counter to constitutional limitations on ownership of land and the government’s own rules on foreign investments.
Indeed, the ESZ must veer away from the experience in the former military bases in Subic and Clark where the US was given full authority and ownership.
Another area for discussion is the declaration that the ESZ will call for “enhanced access” to the country’s “outstanding workforce and talent, mineral endowments, energy resources and strategic position at the crossroads of Indo-Pacific trade.”
Mutually beneficial
The Kilusang Magbubukid ng Pilipinas has characterized the project as a “massive sellout” of the country’s land, minerals, and sovereignty. It also raised fears that the US-initiated project would “intensify” land grabbing, resource extraction, and militarization in the rural areas.
The Makabayan Bloc in the House shared the same concerns and vehemently opposed the plan of the government to take part in the Pax Silica, branding the project as a mere cover to use the Philippines for the US war machine and reduce US dependence on China-linked supply chain.
But the potential benefits of such a grand project cannot be denied, as the Philippines badly needs investments and the promised influx of investments and technology could indeed align with the country’s security and economic interests. This will not only create much-needed jobs, but also provide opportunities for the Filipino workforce to adopt skills in AI and advanced technology.
The economic impact to the Philippines will be enormous, thus the need for the government to closely work with the US to ensure that the agreement is mutually beneficial.
A transparent review of the agreement will remove the initial red flags arising from the scant details in the surprise announcement coming mainly from the US.