EXPLAINER: What is Pax Silica and why are people worried?

With artificial intelligence (AI) rapidly developing, countries are racing to keep up — and the United States is hoping to take the lead through Pax Silica.

Pax Silica is a US-led initiative and economic security framework that hopes to create a global supply chain for AI and the semiconductor industry. The Philippines is among 24 country signatories in this agreement.

“We have some really big plans to bring American business jobs, investment, assistance and so much more to the Filipino people,” said US Ambassador to the Philippines Lee Lipton.

This was also included in the discussions between President Bongbong Marcos and US Secretary of State Marco Rubio this afternoon.

An AI data center contains a number of supercomputers that can think of answers and generate photos and videos, according to Mariz Umali’s report on 24 Oras.

The demand for the chips needed for these supercomputers have increased across the globe.

The term “pax” means peace or stability in Latin, while silica is the main material used in the creation of computer chips.

As part of the Pax Silica effort, an AI-focused industrial hub spanning 1,600 hectares is being eyed in New Clark City in Tarlac.

The goal of the project is to process the country’s critical minerals and to make high-tech components for AI and semiconductors.

Three industries are expected to create jobs because of Pax Silica, that will add to the country's income and tax collection, namely: AI processing, chip manufacturing, and mining.

Department of Trade and Industry Undersecretary Ceferino Rodolfo said the most important thing are the critical minerals, world-class workers and strategic location.

He added that the country will no longer export the unprocessed minerals and instead these will be processed, the value add remains in the country.

Despite criticisms against the project, the government has insisted that this was not just about the creation of AI hubs, but strengthening high-value manufacturing in the Philippines.

Rodolfo said the goal of this project was to ensure that critical minerals remained in the Philippines rather than being exported.

He also said the creation of the facilities would create new industries and generate more tax collection.

Several environmental groups are not convinced.

Excessive consumption of water and energy

The Makabayan Bloc said, "(Pax Silica) threatens to permanently lock the Philippines into having the highest power rates not just in Southeast Asia but in all of Asia."

The project could have negative effects on the environment because AI facilities require massive amounts of water and electricity.

The AI hub needs so much water. If cellphones heat up when used too much, the same goes with AI centers.

So it has a cooling system that in some large centers uses up to five million gallons of water every day.

Kalikasan National Coordinator Cathleen De Guzman said the Pax Silica initiative was “very much water and energy hungry.”

Verbal reassurance of environmental safeguards is not needed, what is needed is scientific data, De Guzman said.

According to the Bases Conversion and Development Authority (BCDA), which will manage the project, they will not compete with the use of groundwater and instead use rain water.

Engr. Joshua Bingcang, BCDA president and CEO, they will build a dam or impounding area as sources of water and surplus water can be shared with the community.

The Palace said the National Water Resources Board has enough water sources in the area and supply for residents is a priority.

Displacement, noise pollution

De Guzman also raised the possible displacement of around 20,000 Aetas and farmers.

Bingcang denied this claim, saying that the project site is titled under the BCDA.

"So it's a public land. Wala po'ng ancestral domain title doon (There is no ancestral domain title there)," he added.

Bingcang said some agricultural land will be affected, but there is a livelihood program and modern urban farming ready for the affected residents.

The BCDA President, in an interview on Super Radyo's DZBB, said there are only around 10 farmers affected, but 200 jobs can be generated by the project.

Kalikasan said the facility could also cause noise pollution, which could disturb local wildlife such as birds.

"Lahat po ng projects namin kumukuha ng ECC (Environmental Compliance Certificate). We will comply, for sustainability. Compliant kami sa environmental regulations," said Bingcang.

(All our projects are ECC certified. We will comply, for sustainability. We are compliant with environmental regulations.)

Factory of computer chips

DTI's Rodolfo explained that they will focus more on manufacturing these AI components rather than making AI data centers.

"Hindi ito tungkol sa pagtatayo ng data center dito sa Pilipinas. Ito ay pag-manufacture ng mga components," he said.

(This is not about building a data center here in the Philippines. This is about manufacturing components.)

On top of the possible issues that the project can bring to the community, the groups have also raised transparency concerns.

For example, the government will also not ask for rent from the developer for two years. The DTI again defended the government, saying that this was standard for large land development projects.

Umali also reported that the public can get more details about the project, documents are posted on the website of the Board of Investment as the BCDA is still working on the lease agreement. — Jean Mangaluz/BAP, GMA News