THE US-led Pax Silica initiative could be a ‘game changer’ for the Philippine electronics sector if it helps attract investments in more advanced semiconductor manufacturing and other higher-value industries, Socioeconomic Planning Secretary Arsenio M. Balisacan said.
In a chance interview with reporters recently, Balisacan said the proposed 1,620-hectare development in New Clark City could help move the country into higher-value segments of global technology supply chains.
‘This Pax Silica, if we succeed in attracting this kind of industry, is going to be a game changer for that sector to become more robust,’ Balisacan said.
See related story in Second Front Page, A13, ‘Pax Silica starts at 500 has, up to 20 firms in 2028-BCDA.’
He said the country’s semiconductor and electronics industry has struggled to keep pace with newer technologies, with much of its existing manufacturing base built around investments made years ago.
Balisacan argued that some of these facilities remain concentrated in older-generation chips and technologies, limiting the country’s ability to capture growing demand linked to artificial intelligence and advanced electronics.
The challenge, he said, is to attract investments that would upgrade the country’s existing manufacturing capabilities and allow it to produce higher-value exports.
Balisacan noted that exports have recently grown faster than imports, with electronics and semiconductors accounting for a significant share of outbound shipments.
Philippine Statistics Authority (PSA) data showed merchandise exports rose by 24.1 percent to $8.77 billion in June from $7.06 billion a year earlier. Imports increased by 19.6 percent to $13.71 billion from $11.46 billion.
Balisacan said the gains from the development should also extend beyond higher export receipts, particularly through the creation of higher-quality jobs and stronger demand for more advanced skills.
‘This should bring high-quality jobs, this should improve the innovation ecosystem of the country…. If you look at it that way, it’s a positive force for development,’ he added.
Data from the Bases Conversion and Development Authority (BCDA) estimates that Pax Silica could attract US$70 billion in investments, create 130,000 to 190,000 direct jobs, and generate 500,000 to 800,000 indirect jobs.
He added that workers would need to undergo upskilling and reskilling to meet the requirements of more technologically advanced manufacturing activities.
The Bases Conversion and Development Authority has estimated that the Pax Silica-linked development could attract as much as $70 billion in investments and generate between 130,000 and 190,000 direct jobs, along with 500,000 to 800,000 indirect jobs.
Over a 25-year period, BCDA projects the development to generate P60 billion in lease income, while annual withholding tax collections could reach P68 billion to P75 billion.
Its export potential has been estimated at as much as $200 billion annually once fully operational.
Access, sovereignty questions
Amid concerns over how the initiative could affect the country’s natural resources and economic sovereignty, Balisacan said details of the arrangement are still evolving and the public should just ‘wait for what will happen there.’
The country’s chief economist also rejected the idea that industries established under Pax Silica would necessarily direct their output solely to the United States, saying production would form part of a wider global supply chain involving several participating economies.
He said the Philippines should instead focus on what it intends to gain from the partnership, particularly investments that would increase the amount of value created domestically.
Under that approach, the government would seek investments that upgrade the semiconductor and electronics industry and establish local processing facilities for critical minerals to increase domestic value.
‘It’s not just about what America or others want us to do. It’s also a question of what we want to bring to the table. That’s why we are very aggressive in pushing for what we want,’ he said.
Balisacan also maintained that the government would retain control over the types of investments allowed into the country, although attracting higher-value facilities would depend on whether the Philippines could provide a competitive environment for investors.