August 5, 2026 l Business Mirror
The Philippine government’s decision to host the first Pax Silica industrial hub in New Clark City signals its intention to compete for investments in artificial intelligence, semiconductors, and advanced manufacturing. As global supply chains continue to shift, the country has a chance to position itself as more than a low-cost production base. The challenge is turning that opportunity into a lasting competitive advantage.
The New Clark City was selected for practical reasons. It has 1,600 hectares of government-owned land, modern transport links, and enough room to accommodate AI data centers, semiconductor facilities, research centers, and supporting industries. This ecozone in Tarlac also sits within the Luzon Economic Corridor, connecting Clark with Subic Bay, Metro Manila and the Port of Batangas.
Less visible are the demands that come with technology-intensive industries. Data centers require dependable electricity, abundant water, and high-speed digital infrastructure. Those requirements cannot be taken for granted. Unlike Subic, New Clark City has no direct access to seawater that could support large-scale desalination, making freshwater supply a continuing concern. New power plants, transmission lines, and utility systems will have to come on stream in step with private investment.
Working closely with the United States through Pax Silica does not mean narrowing the country’s economic choices. Several Southeast Asian neighbors have shown that commercial ties and territorial disputes can be managed on separate tracks.
ietnam and Malaysia continue to pursue economic projects with China despite competing claims in the South China Sea. China remains the largest trading partner of both countries and an important source of investment, manufacturing activity, and export demand. At the same time, neither government has eased its maritime claims. Both continue to strengthen defense cooperation with partners such as the US, Japan, and Australia while asserting their rights under international law. They have chosen to protect their territorial interests without closing the door to economic engagement.
Indonesia offers a similar lesson. Although part of its exclusive economic zone around the Natuna Islands overlaps with Beijing’s nine-dash line, Jakarta has consistently rejected the Chinese claim under the UN Convention on the Law of the Sea. Yet China remains one of Indonesia’s largest investors and trading partners. The dispute has not prevented cooperation in infrastructure, manufacturing, and other sectors that support economic growth.
Meanwhile, the United Nations Conference on Trade and Development (Unctad) disclosed that the Philippine economy has failed to capitalize on the investment boom sweeping across the Asean region. According to the Unctad 2026 World Investment Report, foreign direct investment (FDI) inflows to the Philippines declined by 4.0 percent in 2025—lagging behind FDIs to Singapore, Indonesia, Vietnam, Thailand, and Malaysia.
Our Asean neighbors’ experiences indicate that territorial disputes do not automatically preclude economic cooperation. Each country has defended its maritime claims while pursuing investments and trade that support national development. Whether the Philippines can follow a similar course will depend on its ability to draw clear boundaries between questions of sovereignty and areas where economic cooperation serves the national interest.
***The views expressed herein are his own and do not necessarily reflect the opinion of his office as well as FINEX. For comments, email nextgenmedia@gmail.com. Photo is from Pinterest.