It is the next big thing in our country – the Pax Silica project.
It is perhaps one of the grandest projects that the Philippines could ever have – at least in terms of global partnerships that could tap onto the potentials of harnessing our natural resources, especially minerals. Notwithstanding the enormous opportunity for the country to emerge as a leader in Artifical Intelligence (AI).
While no definite amount of investment commitments were disclosed yet, the mere fact that we are tying up with a US-led coalition of 13 countries is already a source of pride and a prestige if not a win for the Philippines.
Why so? The Philippines is rich with natural resources like minerals and even rare earth elements (REEs) which are vital components in semiconductor and high technology industries. Or to be more adaptable to the times, these are exactly what are needed in the AI industry.
The inclusion of Philippines in the partnership was signed by Trade Undersecretary Ceferino Rodolfo, also the Managing Head and Vice Chairperson of the Board of Investments in Washington DC last April 17. Present also in the signing event were PH Ambassador to the US Babes Romualdez and Finance Secretary Frederick Go who is widely credited for bringing in fresh investments into the country.
The Philippines now joins Australia, Finland, India, Israel, Japan, Qatar, South Korea, Singapore, Sweden, the United Arab Emirates, the United Kingdom and the US in the Pax Silica coalition. Other countries are expected to also join.
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THE SITE. The proposed location for the processing plant for this undertaking will be the New Clark City (NCC), a 10,000-hectare mixed use urban development touted to be the next megalopolis of the Philippines. BCDA is allocating 1,600 hectares for the so-called “representative office” in NCC which straddles Bamban and Capas town in Tarlac province.
BCDA President Jake Bingcang, in a recent TV interview, said that the plan calls for Philippines to gain a higher position in the production value chain in the semiconductor industry. This would mean the Philippines could be getting more in the various stages of semicons and microchips more than just the processing of minerals like copper, gold, chromite and the like.
This would mean semicon design, front-end fabrication, back-end assembly, test and packaging. These are the vital stages towards producing gadgets and devices like smartphones, electric vehicles, equipment and instruments in medical field, trade and commerce, aviation and yes, for defense systems.
This is a multi-trillion dollar industry. This means that if and when the Philippines gets more in the production chain, it would mean more investment projects, more jobs, more livelihood, more families getting lives better. Altogether, this means better economy for the country.
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PH LAWS. Discussions on details about Pax Silica that will establish what the US government calls as “economic security zone” will start this month. The BCDA has ensured the application of Philippine laws in order to ensure high value investments into the country. BIngcang said that the application of these laws such as the Investment Lease Act and the Bases Conversion law were “accepted” during the negotiations.
He added that details of the agreement will be threshed out within the month when representatives from the US would visit the New Clark City (NCC). He added that investment commitment figures will also be known as detailed discussions proceed. As mandated, the BCDA can also offer various “modalities” on the use of former baselands that include lease, joint venture, and concessions.
“We will determine what will be most advantageous to us (Philippines),” Bingcang said.
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PH AND RARE EARTH ELEMENTS. What could usher in the so-called economic security zone? AI is the new anchor and headway in today’s business, commerce, aviation, defense systems, medical advancements and treatments. Transportation like electric vehicles would be a more familiar example that makes use of AI technology. That, aside from making a social media post that changes the way people look (filters) and how you can just ask the web to make you a poster or an invitation card by simply typing a prompt (a command) from nothing at all and without supplying any material at all.
The Manila Observatory, quoting Dr. Rene Claveria of the Ateneo de Manila University’s Environmental Science Department, stated that “geological surveys from the 1970 to 1980s have already identified potential areas of REEs in the Philippines, most of which are in Palawan. “
The article even hinted that Philippines is might not be far behind China which even the US acknowledges as a source of REEs. One of the most interesting findings Claveria shared is that based on crustal abundances, the REE values found in these mining sites do not show significant differences from those in China and the United States.
“Such abundance differs in the very few occurrence of REEs in the copper, gold deposits in other places like Lepanto in Benguet,” Claveria was quoted as saying.
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SEMICON BACKBONE. Semiconductor manufacturing is the super rich man’s feeding ground for giant business empires like that of Elon Mask (Tesla, SpaceX) and Jeff Bozos (Amazon). With Philippines having natural resources – metallic and otherwise – and even REEs, one can do the math (or can no longer do it as it may be infinite) should the country manage to maximize their production from mining, processing, assembly and testing.
As aptly quoted by Bingcang in the interview, US State Department Undersecretary Jacob Helberg said that “if the 20th century ran on oil and steel, our century right now runs on compute and the minerals that feed on it”.
An article in Microchip USA states: “At the heart of AI’s capabilities lies a fundamental enabler: semiconductors. These tiny yet powerful components are the backbone of AI systems, driving its computational power and efficiency. As we stand on the brink of unprecedented technological advancements, the synergy between AI and semiconductors is not only redefining what machines can achieve but also opening doors to transformative possibilities across industries.”
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THE TI EXAMPLE. The establishment of Pax Silica reminds me of the mid 2000s when Texas Instrument (TI) was still deciding where to locate its new facility after operating the Baguio City plant for several years. It was during the time of then President Gloria Macapagal- Arroyo.
Probably unknown to many, it was CDC Chairman Edgardo Pamintuan – then serving in GMA cabinet as Presidential Adviser for External Affairs and Chairman of Subic Clark Alliance for Development (SCAD) – who was instrumental in convincing TI executives to locate in Clark Freeport as talks with then DTI Secretary Peter Favila were not going well.
With Converge Co-Founder and CEO Dennis Anthony Uy who was serving then his technical staff and former Phivolcs head Renato Solidum (now DOST Secretary), Pamintuan had to fly to the TI headquarters in the US. His counter-offer to an attractive package laid by China was a redundant power supply – a dedicated transmission line that would ensure uninterrupted supply of electricity. Pamintuan said the outlay was worth about P1 billion.
Was the capital expenditure shelled by Philippines worth it? TI’s investment into the country is stratospheric. Three years ago, it announced another round of expansion worth $1 billion for its Clark and Baguio facilities. It employs about 3,000 workers.
If TI investments alone runs in the billions of dollars already with its semicon that are the building blocks of electronic systems (it has about 80,000 products), what more of what Pax Silica could bring into the country as we harness our precious resources – not just the minerals but also the skilled English-speaking manpower that Philippines has always been known for.
