Philippines, US to build 1,619-hectare ‘economic security zone’ in Luzon

A 1,619-hectare (ha) industrial hub in Luzon aimed at strengthening supply chains for critical inputs, according to the US Department of State.

In an April 16 fact sheet, the US State Department said the proposed site—located within the Luzon Economic Corridor (LEC)—will be designated as an “Economic Security Zone,” described as a new and first-of-its-kind model for “artificial intelligence (AI)-native investment acceleration hubs” being developed under the Pax Silica Initiative.

The project is intended to “secure inputs vital to American and global supply chains” and serve as a platform for allied manufacturing shaped by market demand, host-country comparative advantages, and evolving industrial needs.

In a separate April 16 media note, the US State Department said the Philippines has formally joined the Pax Silica initiative, launched by the US and 13 other nations, highlighting what it described as a “growing geopolitical consensus that economic security is national security and national security is economic security.”

The Philippines, a US treaty ally, brings “key capabilities and human talent in technology manufacturing, including semiconductors and electronics,” it added.

The Philippine government’s participation was formalised by Department of Trade and Industry (DTI) Undersecretary and Board of Investments (BOI) Managing Head Ceferino S. Rodolfo, who signed the declaration reflecting the country’s entry into Pax Silica.

The initiative builds on existing cooperation frameworks, including the US-Philippines Critical Minerals Framework and the LEC, as both countries mark 80 years of diplomatic relations.

The Pax Silica Initiative, as outlined in the statements, is a broader strategy aimed at transforming how supply chains are organised by linking industrial hubs across partner economies. It seeks to build “a genuine system capable of competing with—and ultimately displacing—the concentrated supply chains on which the world currently depends,” through interconnected manufacturing sites, logistics corridors, and shared financial frameworks. The US State Department also described Pax Silica as a “positive-sum partnership of nations that want to remain competitive and prosperous.”

Under this framework, the planned Luzon hub will serve as “a staging point for a purpose-built platform for allied manufacturing,” where industrial activities are shaped by demand, comparative advantages, and the evolving needs of the Pax Silica network. The site—the first of its kind—is being offered by the Philippines as an Economic Security Zone to “surge production for inputs vital to US supply chains.”

The two governments are looking to establish joint governance frameworks to support the long-term development of the zone, while ensuring “sovereign alignment and shared upside as it scales.” The initiative is also expected to combine US institutional expertise—such as “internationally enforceable contracts, transparent regulatory standards, and expert dispute resolution”—with the Philippines’ workforce, natural resources, and strategic location at the crossroads of Indo-Pacific trade.

The US State Department noted that the Philippines holds reserves of key minerals, including nickel, copper, chromite, and cobalt, which are increasingly critical to global supply chains. It added that the Luzon hub is envisioned as the first in a broader network of Economic Security Zones spanning multiple continents, forming “a constellation of integrated manufacturing sites, logistics corridors, and shared financial instruments” across partner economies.

The Philippines is the 13th signatory to Pax Silica, joining Australia, Finland, India, Israel, Japan, Qatar, Singapore, South Korea, Sweden, the United Arab Emirates (UAE), the United Kingdom (UK), and the US, with additional signatories expected to follow.

According to an exclusive Wall Street Journal (WSJ) report, this is part of Washington’s plan to build a high-tech manufacturing hub in the Philippines to reduce reliance on China-dominated supply chains.

The Luzon-based project will give US firms access to critical inputs, including key minerals, outside Beijing’s control, according to WSJ.