Philippines to Include Sovereignty Clause in Pax Silica Agreement

Philippine officials are set to include a clause in the agreement for the Pax Silica initiative in New Clark City that explicitly preserves the country's sovereignty over the projects. This ensures that expatriate workers employed in the area will not be granted diplomatic immunity. According to Trade Undersecretary Ceferino Rodolfo, the preservation of sovereignty will be incorporated into the governance framework for the Pax Silica industrial hub, which is expected to be signed in November. "It can be stated. It will be stated," Rodolfo told reporters at a briefing in Taguig City on Monday. He emphasized that the Clark Advanced Manufacturing Park project will remain Philippine sovereign territory, and no diplomatic immunity or carve-out of any kind will be allowed. Rodolfo explained that discussions on diplomatic immunity were merely passing as part of possible measures to entice investors to set up shop in the Philippines, and were removed from the table early in negotiations. "It’s not as if we were negotiating and they said ‘We want this, we want this,’ and we said ‘No, you cannot have that.’ It’s in the context of a joint discussion of what will it take to bring in the investors," he said. He added that he was somewhat surprised that many of the initial apprehensions revolved around this point when it had, in fact, become a non-issue very early on. The Philippines and the United States are set to establish a 4,000-acre industrial hub within the Luzon Economic Corridor (LEC), designated as an Economic Security Zone, serving as a new model for AI-native investment hubs under the Pax Silica initiative. Announced in April, the initiative is a US-led effort to build a network of allied supply chains for critical technologies and minerals, with the Philippines hosting it in New Clark City, Tarlac. The master agreement is expected to be signed in November, under which the Bases Conversion and Development Authority (BCDA) will lease out 1,620 hectares of land. "With the US in particular, we are negotiating the master lease agreement between the BCDA as owner of the 1,620-hectare land, and the US government," Rodolfo said. Officials also clarified on Monday that data centers will not be included in the Pax Silica initiative, as its main objective is to process the country’s minerals and to make high-tech components for AI and semiconductors. The project is expected to house the Clark Advanced Manufacturing Plant (CAMP), with an initial $10-billion investment target to kickstart short-term site development and initial facility construction. It is also expected to generate up to 150,000 direct high-value jobs, some 50,000 construction jobs, and up to 800,000 indirect jobs.