(June 11): A US-backed plan to build an artificial intelligence (AI) hub in the Philippines could draw an initial investment of about US$10 billion ($12.9 billion), an official said, and help prop up an economy battered by the Iran war.
That would be just the start of high-end investments from technology and other companies the Philippines aims to attract to a 4,000-acre site that’s envisioned to be its version of Silicon Valley, according to Joshua Bingcang, the president of the state-owned company working with the US on the project.
Manila aims to sign an initial agreement with the US State Department this year and has an option to offer up to a 99-year lease to the US, he said. He added that he’s been on the phone almost daily with US Embassy officials discussing the venture.
The Pax Silica project offers the Philippines a shot to transform its economy, Bingcang, who heads the Bases Conversion and Development Authority, said in an interview on Thursday. “For us, it’s a way to catch up in terms of industrial activity. For the longest time we are a service-oriented economy dependent on importation.”
The US is planning to build the first-of-its-kind industrial hub in the Philippines as it seeks to reduce reliance on Chinese-dominated tech supply chains. The plan comes as the Philippines joined Pax Silica, a Washington-led supply-chain alliance that also includes Australia, India, Israel, Japan and the UK.
The AI supply chain hub, located near the Clark Freeport Zone, a former US air base north of Manila, is expected to host green energy, semiconductor and logistics projects, as well as data centres.
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The hub is yet another step to deepen economic ties between the US and the Philippines, as the treaty allies also strengthen their military relationship.
Bingcang said there are also ambitions to spur investments in mineral processing and move the Philippines into higher-value semiconductor manufacturing.
The Philippine economy is heavily driven by domestic consumption and reliant on imports, vulnerabilities that have been exposed by the oil shock due to the Iran war.
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Bingcang is aware that investors will need certainty, as the Philippines also has a history of policy reversals as governments changed, turning off businesses.
“We want this contract to stand the test of time,” he said. “It should transcend several administrations.”
The 53-year old electrical engineer oversees the agency in charge of developing former military bases into economic hubs. He pitched the project in a letter to US Under Secretary of State for Economic Affairs Jacob Helberg in April after a government colleague asked him whether his agency has 5,000 acres of land that could be offered to the US.
“I don’t have that space, but tell them ‘yes,’ let me worry after,” Bingcang recalls telling his colleague. “The point is you have to grab this kind of opportunity. Otherwise they will have to scout in Vietnam or in Malaysia.”
Helberg visited the site last month together with executives from over a dozen companies, including Young Liu, the chairman of the world’s largest contract electronics maker Hon Hai Precision Industry Co, also known as Foxconn. Bingcang said he did not have discussions with the Foxconn official, adding that the US is in charge of looking for investors to the hub.
“That really is a good, strong testament of how serious the US government and the businessmen are in pursuing the Pax Silica project,” Bingcang said.
Uploaded by Tham Yek Lee
