Any gains from the proposed Pax Silica initiative will likely not be felt within the next two years, Asian Development Bank (ADB) Country Director for the Philippines Andrew Jeffries said.

“Foreign direct investment [FDI], generally, depending on what it is, can take several years to build and construct. Now, there's job creation in the building and construction aspect of it, but it wouldn't be an immediate effect within the next two years or so,” Jeffries told reporters at the multilateral lender’s Mandaluyong headquarters on Wednesday.

The planned Pax Silica initiative, a 4,000-acre industrial hub focused on technology and manufacturing centers within the LEC in New Clark City, has drawn a divisive response from Filipinos after the Philippines joined the US-led initiative in April.

Left-wing groups have raised concerns over the project’s potential environmental risks, as well as the possible exploitation of Filipino labor and assets. The government, meanwhile, has upheld the project’s viability as a means of upgrading technology-oriented manufacturing and exports while capturing a share of the global artificial intelligence (AI) race.

Jeffries likewise backed the initiative’s potential to create more jobs and attract more FDI, which dropped 23.8 percent in the first quarter.

“That initiative [Pax Silica] and others like the Luzon Economic Corridor [LEC], more broadly, are meant to bring specific and higher value-add foreign direct investment into the country. So it would be a positive for job creation and growth, but it's not immediate. There would be a lag,” Jeffries said.

Pax Silica is targeted for a November signing. Trade Undersecretary Perry Rodolfo said at a forum last Tuesday that the noise surrounding the country’s potential participation may have resulted in apprehension among some investors abroad.

“[T]he investors are kind of – maybe [this is] too strong a word, but they are being spooked by what is happening,” Rodolfo said. He noted, however, that the state welcomes the broader discourse surrounding Pax Silica, reaffirming the government’s belief in the project’s benefits.

The ADB cut its Philippine gross domestic product growth projections for this year and next, noting that the country has been overtaken by regional peers that have since pivoted toward more tech-related investments, manufacturing and exports.

Jeffries said more FDI, including projects such as Pax Silica and the LEC, could help close the gap through manufacturing and exports. He also noted the government’s initiatives to improve the ease of doing business and restore investor confidence, which remains broadly pessimistic based on the latest central bank surveys.

“The idea of the more levers that help with growth when certain shocks affect some more than others, and the more diversified your economy, the more resilient.”