ANALYSIS: Pax Silica could reshape the chip industry, but questions remain over the Philippines’ deal

“The question is not whether the Philippines should be in Pax Silica. It is whether the Philippines has negotiated the terms of its participation with the same precision and binding commitment extraction that India, Australia, Japan, and the Netherlands brought to their negotiations,” Germo wrote.

Launched in December 2025, Pax Silica is a coalition of countries working to strengthen supply chains for semiconductors, critical minerals, artificial intelligence and other technologies considered strategic to future economic and geopolitical competition.

The coalition brings together economies with different strengths across the semiconductor ecosystem, from chip design and manufacturing equipment to fabrication, logistics, research and raw materials.

Germo said the Philippines occupies a strategic position within this network because of its mineral resources, decades of experience in electronics manufacturing, and its location in the Indo-Pacific.

He said the country contributes three key advantages to the coalition: critical minerals such as nickel, copper, cobalt and gold; existing assembly, testing and packaging capabilities built over decades of electronics manufacturing; and its strategic geography.

Securing concrete commitments

However, Germo said the benefits the Philippines gains from the partnership will depend on whether concrete commitments are secured.

“What the Philippines receives in return is the central question, and the honest answer is that it depends entirely on the binding commitments that have not yet been publicly documented,” he wrote.

He added that the country must secure agreements that allow it to move beyond traditional electronics assembly and capture more value from the semiconductor supply chain.

“What determines whether the Philippines captures substantially more value from this coalition than it has captured from fifty years of electronics FDI, is whether the specific, binding, contractually enforceable commitments on technology transfer, workforce development at the engineering and design level rather than the assembly level, domestic content requirements, and mineral processing rather than raw ore export are in place and publicly documented,” Germo wrote.

Germo compared the Philippines’ position with other Pax Silica members, including India, Australia and Japan, which he said have established clearer programs around semiconductor manufacturing, critical mineral processing and workforce development.

He also pointed to the Netherlands, whose participation strengthens the coalition through ASML, the only company in the world that produces extreme ultraviolet lithography machines used to manufacture the most advanced semiconductor chips.

For Germo, the Netherlands provides a useful example of how countries can leverage strategic assets within the coalition. He argued that the Philippines should similarly use its participation to secure technology transfer and avoid remaining focused only on assembly operations.

“The Philippines should be extracting from its coalition membership the technology transfer that prevents it from remaining in the assembly layer for a third consecutive generation of global electronics investment,” Germo wrote.

The Philippines’ participation in Pax Silica comes as countries seek to secure semiconductor supply chains amid rising demand from artificial intelligence, data centers and advanced technologies.

Germo said the country’s mineral resources, electronics exports and strategic location make participation in the coalition a significant opportunity. But he added that the outcome will depend on the details of the agreements eventually made public.

Germo said: “The terms that will determine whether those 99 years represent the most consequential economic development in Philippine history or its most consequential missed opportunity have not yet been made public.”

READ: