Can a US-governed ‘Pax Silica’ hub turn Philippines into a chip powerhouse?
The chip-focused ‘economic security zone’ will reportedly operate under US law despite being on Philippine soil
The 4,000-acre (1,619-hectare) hi-tech industrial hub will reportedly be the first of its kind in the world, operating under US common law despite being on Philippine soil.
In a statement on Thursday, the US State Department described the zone as “a purpose-built platform for allied manufacturing”, adding that it would support the “evolving needs of the allied network”.
It added that the zone would combine US expertise on contract law, regulation and dispute resolution with the Philippines’ “outstanding workforce and talent”, mineral endowments, energy resources “and strategic position at the crossroads of Indo-Pacific trade”.
Analysts say the hub could help the Philippines move up the global chip supply chain.
Semiconductors are already the country’s top export, but its role has been largely confined to the lower-value work of assembly, testing and packaging. The Philippine Department of Trade and Industry has set a target of US$110 billion in annual chip exports by 2030, contingent on breaking into higher-value activities such as advanced packaging, integrated circuit design and wafer fabrication.
“The hub can help move the country towards higher-value activities, supported by technology transfer, upskilling and improvements in infrastructure,” said Dindo Manhit, president of the Manila-based Stratbase Institute think tank, who added that the zone would accelerate growth in semiconductors, advanced manufacturing and logistics.
This is really a kick-starter project
Foreign policy researcher Julio Amador, a distinguished visiting fellow at Perry World House research centre in the US, said the project would help push forward the Luzon Economic Corridor, a joint project by the US, Japan and the Philippines linking three major ports and two international airports across four cities on Luzon Island that is projected to generate US$100 billion for the local economy.
“This is really a kick-starter project,” he said, adding that inbound US investments “will really propel the Luzon Economic Corridor”.
The zone would help create a “future-ready and resilient” economic corridor, predicted Chester Cabalza, founder of the International Development and Security Cooperation think tank, adding that the investment created opportunities “for world-class Filipinos to compete in the fifth industrial revolution”.
“This initiative reinforces that the Philippines remains a strategic priority,” he said, noting the country’s rare combination of semiconductor expertise, geostrategic location, abundant natural resources and a large, young workforce.
Michael Ricafort, chief economist at Rizal Commercial Banking Corporation, said the zone could simultaneously deepen the Philippines’ role in US critical-industry supply chains and reduce its exposure to tariff risks on electronics exports.
New foreign direct investment would help bring in the latest technology and generate jobs at a moment when the global artificial intelligence boom has sent semiconductor demand surging, he added.
Manhit said a multiplier effect would take hold once the initial infrastructure and anchor investments were in place, with suppliers and service providers clustering around the zone, expanding local economic activity and deepening integration into global supply chains.
Amador added that the hub reflected an evolution of the US-Philippine alliance.
“Economics is now surely part of the security perspectives of the two countries,” he said. “President Ferdinand Marcos Jnr said that economic security is national security, and this is the realisation of that.”
US-Philippines ties enter ‘more mature’ phase with planned fuel depot
The facility in Davao signals that defence ties are now focusing on sustainment, endurance and operational continuity, analysts say
Located far from the flashpoint reefs at the centre of Manila’s maritime dispute with Beijing in the South China Sea, the depot marks what one observer called a “more mature and more serious stage” in the US-Philippine alliance: a shift from base access and drills towards the grinding business of keeping forces fuelled, dispersed and in the field for the long haul.
The US Defence Logistics Agency published a solicitation on March 31, inviting US-based contractors to bid for a Defence Fuel Support Point along the western coast of the Davao Gulf, including Davao City, Davao del Sur and Malalag Bay.
According to a 15-page contract brief, the facility would hold about 977,000 barrels of US government-owned fuel for warships and aircraft over a four-year period, split between naval distillate F-76, used by surface vessels, and JP-5, a high-flashpoint jet fuel designed for use aboard aircraft carriers.
Bids will be accepted until June 29 and the project is slated for completion by 2028.
The Davao site will join a chain of forward refuelling hubs the US is building across the Western Pacific, alongside planned facilities in Darwin, Australia and Port Moresby, Papua New Guinea.
