Philippines, US to build industrial hub to strengthen supply chain security

Semiconductor chips are seen on a circuit board of a computer in this illustration picture taken February 25, 2022. (REUTERS/Florence Lo/Illustration)

MANILA, April 17 (Reuters) - The United States and the Philippines will build a 4,000-acre (1,620-hectare) industrial hub after Manila joined a Washington-led initiative to secure AI and semiconductor supply chains, the U.S. State Department said in a statement. 

The Philippines becomes the 13th country to join Pax Silica, a program seeking to safeguard the full technology supply chain, including critical minerals, advanced manufacturing, computing and data infrastructure.  

The initiative is a key pillar of the Trump administration's economic statecraft strategy aimed at reducing its dependence on rival nations and strengthening cooperation among allied partners. Other signatories include Australia, Finland, India, Qatar, South Korea and Singapore. 

The new industrial hub will be built in the Luzon Economic Corridor, a strategic hub for economic activity that includes the capital Manila and neighboring regions with industrial and manufacturing activities. The Philippines, Japan and the United States have committed to ramp up infrastructure investments in the corridor under a trilateral framework agreement. 

"It is intended to serve as a staging point for a purpose-built platform for allied manufacturing," the State Department said in a statement. 

"The two Allies are committed to strengthening shared supply chains in critical minerals, semiconductors, electronics, and other goods," it added. 

The hub will be set up in New Clark City, the Philippines' flagship planned metropolis north of Manila, which is owned and developed by the government through the Bases Conversion and Development Authority (BCDA).

BCDA Chairman Hilario Paredes said authorities would be assessing whether sufficient contiguous land was available to host the project.

"We will check if we have space that is contiguous," Paredes said. "We will have to sit down and finalise the details." He added that the envisioned hub would be a commercial facility.

New Clark City sits on state‑owned land that was part of a former U.S. military reservation transferred to the Philippine government after U.S. forces withdrew from Philippine bases in 1991.

Relations between Manila and Washington have blossomed under Philippine President Ferdinand Marcos Jr., who has pivoted closer to the United States. The former U.S. colony is also central to Washington's efforts to counter China's assertiveness in the South China Sea.



(Reporting by Mikhail Flores and Karen Lema; Editing by John Mair and Chizu Nomiyama )