The United States and the Philippines are moving “very, very quickly” on a planned 4,000-acre artificial intelligence and supply chain hub in New Clark City, north of Manila, according to Jacob Helberg, the Under 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 land that is intended to become the inaugural “AI-native industrial acceleration hub” under the Pax Silica initiative, Washington’s flagship programme for securing AI and semiconductor supply chains among allied nations.

The hub, located within the Luzon Economic Corridor, is designed to support emerging industries in AI, digital infrastructure, advanced manufacturing, and critical mineral processing. The Philippines joined Pax Silica in April as the alliance’s 13th member, alongside 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 programme, and its progress, or lack of it, will test whether Pax Silica can move from diplomatic declarations to operational infrastructure.

What Pax Silica is building

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The Bases Conversion and Development Authority, which manages the former US military base at Clark, has allocated a 1,618-hectare parcel within New Clark City for the project. The State Department has designated it a “Golden Node,” a term for AI-native investment acceleration hubs that are intended to serve as anchors for the alliance’s supply chain strategy. The site is envisioned as a convergence point for technology firms, research institutions, and government agencies working on AI computing infrastructure, semiconductor packaging, and the processing of critical minerals including nickel, cobalt, and copper, all of which the Philippines produces in significant quantities.

The project sits within a broader US effort to restructure global technology supply chains away from dependence on China. Beijing controls an estimated 90 per cent of rare earth refining capacity and dominates several stages of the semiconductor production process. Pax Silica’s strategic logic is to create alternative nodes of production in allied countries, reducing the leverage that any single nation, particularly China, holds over the inputs required for AI and advanced computing. The Philippines is a logical candidate: semiconductors already account for roughly 60 per cent of the country’s total merchandise exports, though its industry is concentrated in the lower-value segments of assembly, testing, and packaging rather than fabrication.

The investor protection question

Helberg’s remarks on Monday focused heavily on the need for “durability and certainty” for American investors. “Investors who are going to spend billions of dollars to build out very expensive capex need to make sure that those investments need to outlive administrations in both of our countries,” he said, referring to capital expenditure. The comment reflects a practical concern: the Philippines has a six-year presidential term with no re-election, and investment frameworks negotiated under one administration have historically been vulnerable to reversal under the next.

The most contentious aspect of the arrangement is the question of legal jurisdiction. Media reports have suggested that American personnel based at the site would receive diplomatic immunity once it becomes operational. Joshua Bingcang, the chief executive of the BCDA, directly contradicted this, stating: “That’s their request but we did not agree to that.” The distinction matters. An arrangement that placed a 4,000-acre 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 spent decades negotiating the closure of US military bases at Clark and Subic Bay.

Bingcang has characterised the arrangement as a “normal commercial agreement,” comparable to previous projects in Clark involving firms from Japan, Singapore, and South Korea. The BCDA has offered a two-year grace period on lease payments, treated as an in-kind contribution to the project’s development, with annual lease rates from the third year onwards to be determined separately. The terms are generous but not exceptional by the standards of special economic zones in Southeast Asia, where governments routinely offer tax holidays and subsidised land to attract foreign investment.

The geopolitical context

The Clark hub 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, a strategy that also includes chip equipment export controls and domestic manufacturing incentives under the CHIPS Act. The Philippines’ participation in Pax Silica places it more firmly in Washington’s orbit at a moment when the US-China competition for influence in Southeast Asia is intensifying.

For Manila, the calculus is economic as much as strategic. The Philippines has long aspired to move up the semiconductor value chain, from assembly and packaging to higher-value design and fabrication. The BCDA has courted Taiwanese firms including TSMC and UMC, and the Pax Silica hub is framed as a vehicle for that transition. Whether it delivers depends on execution: building AI computing infrastructure, semiconductor packaging facilities, and critical mineral processing plants on a 4,000-acre site requires sustained investment, reliable power supply, and a workforce with skills that the Philippines is still developing.

The enforcement of export controls adds another layer of complexity. The US has tightened restrictions on the sale of advanced computing chips and chipmaking equipment to China through a series of measures since 2022, most recently with 25 per cent tariffs on advanced semiconductor imports imposed in January 2026. Pax Silica’s member countries are expected to align their export controls with American rules, a requirement that the proposed MATCH Act would formalise by giving the Netherlands and Japan 150 days to comply or face unilateral US enforcement. For the Philippines, which has no advanced chip fabrication capacity of its own, the immediate export control implications are limited, but the broader alignment with US technology policy carries long-term diplomatic costs in its relationship with Beijing.

Timeline and outlook

The BCDA and the Philippine Board of Investments are targeting groundbreaking before the end of 2028, with Helberg’s visit this week representing the first concrete step toward that timeline. The “very, very quickly” characterisation 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 routinely face delays from permitting, land disputes, and changes in political leadership.

Helberg’s itinerary also includes Singapore, where he will lead a US-ASEAN AI Ministerial Roundtable on potential AI collaboration through the US AI Exports Programme. The pairing of the two stops, a physical site inspection in the Philippines followed by a policy discussion in Singapore, illustrates Pax Silica’s dual nature: it is both a concrete infrastructure programme and a diplomatic framework for aligning allied technology policies. The question is whether the concrete part can keep pace with the diplomatic ambitions. The US-China chip war has already reshaped global semiconductor trade, but building new production capacity in allied countries is a slower and more expensive process than restricting exports from existing ones.

For the Philippines, the stakes are significant. The country’s semiconductor industry generated $40 billion in exports in 2024, but almost all of that value came from assembly and packaging rather than the higher-margin stages of the supply chain. Pax Silica offers a pathway to change that, backed by American capital and technology. But the pathway runs through unresolved questions about legal jurisdiction, investor protection, sovereignty, and the diplomatic balancing act required to host a US-aligned technology hub 800 kilometres from the South China Sea.