Former Bangko Sentral ng Pilipinas (BSP) official Diwa Guinigundo
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Former Bangko Sentral ng Pilipinas (BSP) official Diwa Guinigundo has urged the government to ensure the proposed Pax Silica initiative delivers tangible benefits to the Philippines, saying the country must capture a fair share of gains from the planned technology and manufacturing hub in New Clark City.
In a recent commentary, Guinigundo said the initiative presents an opportunity for the Philippines to gain a larger foothold in global technology, manufacturing and artificial intelligence, but concerns remain over how much value the country would actually capture as the anticipated November signing approaches.
“Pax Silica should be judged by whether it helps the Philippines escape its longstanding position in the lower-value segments of global production,” he said.
“The ultimate question is not simply how much foreign investment arrives, but whether Filipinos become producers, innovators and value creators in the new technology economy.”
The proposed 4,000-acre industrial hub, focused on technology and manufacturing within the Luzon Economic Corridor (LEC) in New Clark City, has drawn mixed reactions since the Philippines joined the US-led initiative in April.
Left-wing groups have raised concerns over potential environmental damage and the possible exploitation of Filipino labor and resources.
The government, meanwhile, has defended the initiative as a way to upgrade technology-oriented manufacturing and exports while securing a share of the global AI race. Trade Undersecretary Ceferino Rodolfo has said the initiative would remain under Philippine jurisdiction and support the country’s existing development goals.
“The projects remain Philippine projects. The development objectives remain Philippine development objectives,” he told reporters last month.
“Pax Silica can help accelerate them. Pax Silica allows us to finally monetize our being a trustworthy trading partner.”
Guinigundo said both supportive and critical views deserve “some consideration,” stressing that the country’s interests must remain central to its participation.
“Does Philippine participation increase domestic value added? That means technology transfer, Filipino engineers and scientists, supplier development, research and development, skills upgrading, local SMEs, and eventually, Philippine participation in higher-value segments of the technology chain. Otherwise, we would simply be reproducing the very value-chain trap we are trying to escape,” he said.
Foreign direct investment continued to decline, with the latest BSP data showing net inflows slumping 44 percent year-on-year in July. Guinigundo said the government must also uphold its commitment to transparency amid concerns about the potential displacement of Indigenous communities and the project’s environmental and energy requirements.
“The public should see the framework, understand the obligations, know the fiscal and environmental implications, and have sufficient opportunity for scrutiny before irreversible commitments are made. The growing number of participating countries should give Manila greater negotiating confidence rather than less,” he said.
Ultimately, Guinigundo said the Philippines should not shy away from participating in the expanding technology economy but must set clear conditions for the initiative.
“Those terms should include competitive and additional power and water supplies; environmental sustainability; protection of agricultural and Indigenous communities; technology transfer; Filipino skills development; domestic supplier participation; transparent contracts; Philippine jurisdiction; and measurable increases in domestic value added. Above all, governance must determine the outcome.”
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