In case you missed it, US President Donald Trump is soon coming to the Philippines. Malacañang has confirmed his attendance at the ASEAN Summit and related meetings in Manila on November 16 to 18.

One deal that Philippine officials had hoped to sign around the time of his visit is the framework for the proposed Pax Silica industrial hub in New Clark City. But as of Tuesday November 3, Bases Conversion and Development Authority (BCDA) chief Joshua Bingcang said the framework had been submitted to Malacañang and there was still no signing date. Whether there will be a signing during the visit, and whether Trump himself will sign, remains open.

But in fact, the Philippines already joined Pax Silica in April when it signed the declaration. That brought us into a US-led effort to build more secure supply chains for critical minerals, semiconductors, and other technologies that underpin artificial intelligence. The framework now awaiting signature concerns how the proposed 4,000-acre hub in Tarlac would be developed.

Even after that agreement is signed, we’ll still have to see which companies actually invest, what they build, and what they commit to doing here.

The signing date has gotten a lot of attention. But in this piece, I’d like to explore exactly what the Marcos administration is asking for in return. What’s in it for us?

Hosting versus upgrading

Two recent papers by my UP School of Economics (UPSE) colleague Annette Balaoing-Pelkmans help explain what’s at stake.

In her paper for the UP Center for Integrative and Development Studies (UP CIDS), she draws a distinction between hosting an industry and acquiring the capabilities to do more valuable work in it.

Take semiconductors. Say a multinational opens a plant in Clark and hires Filipino engineers to run equipment that tests chips. Over time, those engineers get better at their jobs: they can test more chips in a day, catch defects earlier, and waste fewer materials.

All of that is valuable, for sure. But imagine that the Filipino team also gets to develop the tests, figure out why the chips are failing, and work with the design team to fix the problem. That’s a different kind of gain. The engineers can take on more complex work, and those skills can travel to other firms or help start new ones. That would be a genuine technology transfer.

You see, the Philippines already assembles and tests semiconductors. The question is how much more of the engineering we’ll get to do. Any foreign company can set up shop in Tarlac and still have its tests designed abroad, buy most of its sophisticated inputs from its usual suppliers, and keep its research at headquarters. Its factory can create jobs and boost exports while leaving our place in the supply chain largely where it was.

Annette’s other paper, a UPSE Discussion Paper, is written from the perspective of the Tatak Pinoy Strategy, helps explain why that can happen. Drawing on consultations in electronics, semiconductors, and IT and business process management, she points to capabilities we already have in areas like chip design and cybersecurity.

The difficulty, she says, is getting more firms and workers to build on them. Take for instance the case of MYPAD, an effort to strengthen microelectronics education and connect it with industry. It lost momentum for lack of sustained institutional backing.

It takes years to train engineers, develop suppliers, and build research partnerships. The institutions doing that work need funding and a clear mandate well after the launch event is over.

What are we paying for?

There’s another important question to ask: How much of the investment would have happened anyway?

Suppose a company was already looking to expand its Philippine operations. If the government offers it a tax break to move that expansion to Clark, officials might count the entire factory as a win for Pax Silica.

For taxpayers, the relevant gain is whatever the offer actually secured beyond the company’s original plans. Perhaps the firm adds an engineering team, or gives local suppliers a route to qualify for contracts. We should be able to say what that extra benefit is and how much we paid for it.

The same scrutiny should apply to what we build with public money in support of Pax Silica. A more reliable power grid and better freight links can serve many businesses, whether or not the hub attracts its intended tenants.

Infrastructure built for a single investor is a different proposition. Who pays if that investor backs out? And before committing land and water to a project, what will be left for nearby communities and farms in a dry year? Those questions deserve answers while we still have leverage to change the terms.

Trump card

As Trump’s arrival approaches, let us demand answers to the following questions: Exactly how many Filipinos will be trained and given responsibility for advanced engineering work? Will local firms get a chance to qualify as suppliers, and who will help them meet the standards? If public money goes into joint research, what rights will Philippine universities and firms have to use the results? And what happens to the incentives if the investor falls short?

Must Read [In This Economy] Risks of Pax Silica [In This Economy] Risks of Pax Silica

In the end, Trump’s visit gives President Marcos a good occasion to explain what we’re negotiating for. He can start by making the proposed terms public and telling us what Filipinos are being asked to put up for the project.

Perhaps Marcos should take a leaf from Trump’s own book. In The Art of the Deal, Trump and his coauthor Tony Schwartz write, “The worst thing you can possibly do in a deal is seem desperate to make it.”

Honestly, I’m no Trump fan, but that’s actually good advice worth taking. Marcos has no reason to treat Pax Silica as our last chance to upgrade Philippine manufacturing. If the terms still need work when Trump comes to Manila, the deal can wait.

The US wants more secure supply chains, and we can offer a site in Clark and decades of experience in semiconductor assembly and testing. In return, though, Marcos should ask for specific commitments on what engineering work will be done here and how Filipino firms can qualify for supplier contracts.

We have a trump card—and we should use it. – Rappler.com

Jan Carlo “JC” Punongbayan, PhD, is an associate professor at the University of the Philippines School of Economics. His professional experience includes the Securities and Exchange Commission, the World Bank Office in Manila, the Far Eastern University Public Policy Center, and the National Economic and Development Authority. JC writes a weekly economics column for Rappler. He is also co-founder of UsapangEcon.com and co-host of Usapang Econ Podcast.

His first book, False Nostalgia: The Marcos “Golden Age” Myths and How to Debunk Them, was published by Ateneo de Manila University Press in February 2023. His second book, Twin Plagues: How Duterte and COVID-19 Wrecked the Philippine Economy, was published by Penguin Random House SEA in June 2026. Follow him on Instagram (@jcpunongbayan).

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