Philippines races to turn Pax Silica into reality before political changes derail dreams

The Philippines has less than two years to turn its ambitious Pax Silica project from a US-backed plan into a functioning industrial hub before a change of government in Manila – and potentially Washington – puts its future to the test.Pax Silica is an initiative by US President Donald Trump’s administration to diversify US supplies of critical minerals and semiconductors. The Philippines is seeking to position itself as a manufacturing base for companies looking to reduce their dependence on China.With Philippine President Ferdinand Marcos Jnr due to leave office in 2028 and Trump facing midterm elections next year that could change control of Congress, the project needs to move quickly to establish agreements and infrastructure that can survive political change, according to Jonathan Ravelas, a former chief market strategist at the Philippines’ largest bank, BDO.“The faster the government can institutionalise agreements and deliver infrastructure, the lower the political risk,” Ravelas, now managing director of eManagement for Business and Marketing Services, told This Week in Asia.The question is whether Manila can deliver the reliable power, infrastructure and regulatory certainty investors need to commit billions of dollars before the political clock runs out. For now, much of it remains on the drawing board.On April 16, Washington accepted an offer from Manila to convert a 1,600-hectare (4,000-acre) plot of land – rent-free for two years – into the “Pax Silica coordination office”.A proposed area where the Pax Silica hub might be built in Capas, Tarlac province. Photo: AFPThe site sits inside the 9,450-hectare New Clark City – part of the much larger Clark Freeport and Special Economic Zone, a master-planned development envisioned to host government offices, sports facilities and other major infrastructure.As China dominates the supply and processing of several critical minerals used in advanced manufacturing, supply-chain diversification is a strategic priority for Washington. In February, the Philippines signed a memorandum of understanding on critical minerals with the US.