TL; DR
The US and the Philippines are moving “very, very quickly” on a 4,000-acre artificial intelligence and supply chain center in New Clark City, the first physical facility under the Pax Silica initiative. Deputy Secretary of State Jacob Helberg visited the site with American companies, while the Philippines rejected the US request for diplomatic immunity at the facility.
The United States and the Philippines are moving “very, very quickly” on a planned 4,000-hectare artificial intelligence and supply chain hub in New Clark City, north of Manila. According to Jacob HelbergDeputy Secretary of State for Economic Affairs. Helberg visited the proposed site on Monday with more than a dozen American companies, the first high-level inspection of the land intended to be the first “AI-native industrial acceleration center” under the Pax Silica initiative, Washington’s flagship program to power artificial intelligence and semiconductor supply chains.
Located in the Luzon Economic Corridor, the center is designed to support emerging industries in artificial intelligence, digital infrastructure, advanced manufacturing and critical mineral processing. The Philippines joined Pax Silica in April as the alliance’s 13th member, along with Australia, Finland, India, Israel, Japan, the Netherlands, Qatar, Singapore, South Korea, the United Arab Emirates and the United Kingdom. The Clark site is the first physical facility to be developed under the program, and its development, or lack thereof, will test whether Pax Silica moves from diplomatic declarations to operational infrastructure.
What does Pax Silica build?
💜 of EU technology
The latest rumblings from the EU tech scene, a story from our wise founder Boris and some questionable AI art. Free in your inbox every week. Register now!
The Base Conversion and Development Authority, which manages the former US military base in Clark, has earmarked 1,618 acres within New Clark City for the project. The State Department has named it a “Golden Hub” for local investment acceleration hubs with artificial intelligence, intended to serve as an anchor for the alliance’s supply chain strategy. The site is envisioned as a convergence point for technology firms, research institutes and government agencies working on AI computing infrastructure, semiconductor packaging and the processing of critical minerals, including nickel, cobalt and copper, which the Philippines produces in significant quantities.
The project sits within a wider framework The US is working to rebuild global technology supply chains Getting rid of dependence on China. Beijing controls about 90 percent of rare earth processing capacity and dominates several stages of the semiconductor manufacturing process. Pax Silica’s strategic rationale is to create alternative manufacturing hubs in allied countries, reducing the leverage any nation, especially China, has over the inputs required for AI and advanced computing. The Philippines is a logical candidate: semiconductors already account for about 60 percent of the country’s total merchandise exports, although its industry is concentrated in the lower-value segments of assembly, testing and packaging rather than manufacturing.
The issue of investor protection
Helberg’s remarks on Monday focused heavily on the need for “consistency and certainty” for American investors. “Investors who intend to spend billions of dollars to create very expensive capital must be assured that these investments must outlive the administrations in both of our countries,” he said. The comment reflects a practical concern: the Philippines has a six-year presidential term without reelection, and investment frameworks negotiated under one administration have historically been vulnerable to reversal in the next.
The most controversial aspect of the agreement is the issue of legal jurisdiction. Media reports suggested that American personnel stationed there would receive diplomatic immunity once the site became operational. Joshua Bingcang, chief executive of BCDA, directly contradicted this, saying: “This is their request, but we did not agree to it.” The difference is important. An arrangement that would place the 4,000-hectare industrial zone under US common law with diplomatic-style protections would be unprecedented for an overseas commercial facility and would raise significant sovereignty concerns in a country that has spent decades negotiating the closure of US military bases in Clark and Subic Bay.
Bingcang described the arrangement as a “normal commercial arrangement” comparable to previous projects at Clark involving firms from Japan, Singapore and South Korea. BCDA has proposed a two-year grace period on lease payments, which will be treated as an in-kind contribution to the development of the project, and from the third year, annual rental rates will be determined separately. The terms are generous but not exceptional by the standards of special economic zones in Southeast Asia, where governments regularly offer tax holidays and subsidized land to attract foreign investment.
Geopolitical context
The Clark center does not exist in a vacuum. It is one element of a broader US strategy to build allied infrastructure that can reduce dependence on Chinese-dominated supply chains. export control of chip equipment and domestic production incentives under the CHIPS Act. The Philippines’ participation in Pax Silica places it more firmly in Washington’s orbit at a time when the US-China competition for influence in Southeast Asia is intensifying.
The calculation for Manila is both economic and strategic. The Philippines has long aspired to move up the semiconductor value chain from assembly and packaging to high-value design and manufacturing. BCDA approached Taiwanese firms including TSMC and UMC, and the Pax Silica center was developed as a vehicle for this transition. Whether or not it is delivered depends on implementation: Building AI computing infrastructure, semiconductor packaging facilities and critical mineral processing plants on 4,000 acres requires continued investment, reliable power supplies and a workforce with skills that the Philippines is still developing.
The implementation of export controls adds another layer of complexity. The US has tightened restrictions on sales of advanced computing chips and chipmaking equipment to China through a series of measures since 2022, most recently imposing a 25 percent tariff on advanced semiconductor imports in January 2026. Pax Silica member countries are expected to align their export controls with American regulations. 150 days to comply or face unilateral US enforcement. For the Philippines, which lacks its own advanced chip manufacturing capabilities, the immediate implications of export controls are limited, but a broader alignment with US technology policy carries long-term diplomatic costs in its relationship with Beijing.
Timeline and outlook
BCDA and the Philippine Investment Board are targeting groundbreaking by the end of 2028, with Helberg’s visit this week representing the first concrete step toward that timeline. The “very, very fast” characterization is relative: two years from site visit to groundbreaking is fast by the standards of large-scale industrial development in the Philippines, where infrastructure projects regularly face permitting delays, land disputes and changes in political leadership.
Helberg’s itinerary also includes Singapore, where he will chair a US-ASEAN AI Ministers’ Roundtable on potential AI cooperation through the US AI Export Program. Combining the two stops, a physical site inspection in the Philippines followed by a policy discussion in Singapore, demonstrates the dual nature of Pax Silica: it is both a concrete infrastructure program and a diplomatic framework for aligning allied technology policies. The question is whether the concrete part can keep up with the diplomatic ambitions. The US-China chip war has already reshaped the global semiconductor tradebut creating new production capacity in allied countries is a slower and more expensive process than restricting exports from existing countries.
The stakes for the Philippines are significant. The country’s semiconductor industry exported $40 billion in 2024, but almost all of that value came from assembly and packaging, not the high-margin stages of the supply chain. Pax Silica offers a way to change that, backed by American capital and technology. But this way legal jurisdiction, investor protection, sovereignty and a diplomatic balancing act It is required to host a US-aligned technology center 800 kilometers from the South China Sea.
