Without suggesting at all that I am thoroughly versed in Pax Silica, based on what I have researched so far and what I picked up during a recent meeting of our Rotary Club, which had as a guest speaker the US Embassy’s Economic Counselor, Ms. Sharyn Fitzgerald, allow me to do my share in spreading the word about Pax Silica.
In a nutshell, Pax Silica, which translates literally as “Peace Silicon,” is a US-driven multinational supply chain initiative, primarily with its Asian and other Western allies, that seeks to counter the dominance of China in the production of semiconductor silicon chips, a critical component used in AI computers and system applications.
With the rapid development of more and more advanced AI applications, whichever country controls the supply side of the AI raw materials and components will logically have a decisive edge in the race for dominance on the geopolitical front.
Why the Philippines and what are the benefits to us of Pax Silica?
Pax Silica in the Philippines will be strategically positioned geographically within the Luzon Economic Corridor of Subic Bay, Clark, Manila and Batangas. It will spur investments in digital connectivity, energy, advanced manufacturing, transport and logistics.
We have the human talent in technology manufacturing, particularly in semiconductor chip assembly and electronics. Our country is the fifth most mineralized in the world. Notably, we are the world’s second-largest nickel producer and are sitting on an estimated $1 trillion in untapped reserves of copper, gold, nickel, cobalt, chromite, silver and zinc. This will mark our entry into the rarified arena of AI development, which will elevate our current role of being a mere supplier of mineral resources with low value-added margins to transitioning to the higher value-added refining and processing end.
Investments are estimated to be anywhere between $40 billion and $80 billion, with about $10 billion in initial investments within the first five years. From 130,000 to 190,000 new direct jobs and 500,000 to 800,000 indirect and induced jobs will be created.
When fully operational, exports are estimated to reach $200 billion. Annual tax revenues for the government will be about P68 billion to P70 billion annually.
These are mind-boggling numbers that I can’t even begin to imagine how all this will benefit so many generations of Filipinos to come. But behind every silver lining, there are surely dark clouds to be wary of. And what are the key realities to consider?
There is the matter of energy resources needed to power up the envisioned development. The projected demand of 3 gigawatts (GW) is equivalent to 16 percent of Luzon’s current grid capacity. No single generation source will be sufficient to meet this demand.
According to Dr. Teodoro Mendoza of the Faculty of Crop Science, UP Los Baños, the optimal design will be a combination of 2-GW solar renewable energy with battery storage and 1-GW liquefied natural gas baseload capacity.
The constraint to this mix could be the land area required, particularly for solar. As a last resort, there is the nuclear power option mentioned by President Marcos during his recent SoNA, which, however, will surely be controversial.
Then there is the massive amount of water that will be required to cool off the envisioned data centers, estimated to be 39 billion liters annually, equal to the irrigation needs of thousands of hectares of riceland. The sticky issue here is the food security risk, particularly with the El Niño drought phenomenon that never fails to plague us year after year.
There are other issues to consider, such as being on the radar screen of two giants colliding for geopolitical dominance, with us being caught in the middle. There is also the concern of environmentalists, who will be wary of any pollution fallout.
And on the human side, there’s the very real possibility of the displacement of the indigenous Aeta people from their ancestral lands and livelihoods.
All of the above concerns are valid and tough issues to consider. But as at any crossroads, we can’t stand still. We will have to make a choice. Personally, I believe it’s high time we took a chance to reverse our fortunes. We have to take the risk.
What is your decision?
Until next week… OBF!
