The Pax Silica Paradox
Issue 58 — Key Developments Across the Philippines, Singapore, Timor-Leste, and Vietnam
Editor’s Note
by Karen Ysabelle R. David, Lead Editor - Pacific Corridor Desk
In the glitzy planned metropolis of New Clark City in the Philippines, a United States-led AI hub is set to rise: this is the controversial and paradoxical Pax Silica. On one hand, there are the grand and heady promises of jobs and investments and progress; on the other, there are the locals’ anxieties about the project’s impact on water, power, and land. Will New Clark City become the next Silicon Valley or will it be branded as government folly?
Meanwhile, updates from the other countries of the Pacific Corridor this week: Singapore reaches out to countries closer to home as its Prime Minister visits Indonesia and Timor-Leste. But the latter’s government is concerned with domestic issues, as a proposal to introduce a criminal defamation law generates controversy among the Timorese public. And in Vietnam, a new decree changes the game for renewable energy industry players in the country.
The Philippines 🇵🇭
Price of Becoming “Silicon Valley”: Pax Silica in the Philippines
by Eduardo G. Fajermo Jr., in Angeles City
The Philippines wants New Clark City to become more than a planned metropolis. Under the United States-led Pax Silica initiative, it is being positioned as a future hub for artificial intelligence (AI), semiconductors, critical minerals, and advanced manufacturing. The promises are significant: jobs, investments, supply-chain security, and a chance for the country to move from being a peripheral participant in global technology to a more active player in the industries shaping the next century.
But the question now being asked in Pampanga and Tarlac is no less significant: at what local cost?
The Bases Conversion and Development Authority has identified a 4,000-acre site in New Clark City for the proposed Pax Silica Coordination Office, which is meant to connect technology firms, research institutions, and government agencies in building an AI and high-value manufacturing ecosystem.
Finance Secretary Frederick Go said joining Pax Silica would help ensure that the country’s mineral resources and strategic location are not merely supporting global industries “from the margins,” but are used to build future industries. US Undersecretary of State for Economic Affairs Jacob Helberg described the project as building “manufacturing ecosystems of the next century,” while BCDA President Joshua Bingcang said it could create quality jobs and increase local enterprise participation in the innovation economy.
That is the optimistic version: Pax Silica as a second chance at industrialization. For decades, the Philippines has watched neighbors deepen their manufacturing base while it leaned heavily on services, remittances, and consumption. If New Clark City can host higher-value production linked to AI, semiconductors, and advanced supply chains, the project could help correct an old economic weakness.
Yet the political economy of Pax Silica is not only about ambition. It is also about trust.
Defense Secretary Gilberto Teodoro Jr. has rejected claims that the project is war-driven, calling it a resilience and industrialization initiative rather than a military imposition. He said Pax Silica is a manufacturing and high-technology endeavor meant to stabilize critical-material supply chains and place the Philippines inside the global manufacturing cycle. That clarification matters because the project is arriving in a region already shaped by US–China competition, South China Sea tensions, and the Philippines’ closer security alignment with Washington.
Still, telling the public that Pax Silica is “not war” does not fully answer the more immediate civilian fear: water, electricity, land, and control. Teodoro has also said the Pax Silica project will not threaten water supply, a concern that has grown as discussions around AI hubs and data centers have entered local public debate. For residents already familiar with water interruptions, heat, power costs, and uneven public utilities, “Silicon Valley” can sound less like national progress and more like another elite development whose burdens are local while its gains are abstract.
The promise of Pax Silica is real. So are the anxieties around it. If managed well, it could help move the Philippines up the technology value chain and give Central Luzon a stronger industrial future. If managed poorly, it could become another symbol of development imposed from above, celebrated in boardrooms, questioned in households, and paid for through local resource strain.
The question, then, is not simply whether New Clark City can become the Philippines’ Silicon Valley. The harder question is whether it can become one without making nearby communities feel like collateral damage. If Pax Silica is truly about resilience, then resilience must begin with the people who will live beside it.
Eduardo is a Political Science graduate and MA Political Science candidate at the University of Santo Tomas, researching democracy, disaster governance, and inclusive policy in the Global South. He is a former faculty member at Holy Angel University, where he taught Philippine history and contemporary global issues. He also worked with a senator in the Guam Legislature, contributing to policy research and legislative analysis.
Singapore 🇸🇬
Singapore Deepens Relations with Timor-Leste and Indonesia
by Nurul Aini, in Singapore
As Singapore navigates complex relations with Russia, it is simultaneously deepening its relationship with Timor-Leste. The visit by Singapore’s Prime Minister Lawrence Wong from 2 to 3 July 2026 to Dili is the first of its kind by a Singaporean head of government. As Singapore has been actively supporting Timor-Leste in their ascension toward ASEAN membership, this visit shifts the partnership from pre-ASEAN membership assistance to post-membership partnership by developing bilateral cooperation, especially in areas where both countries are strong. It also explores other possibilities with the aim of reciprocally strengthening each other’s capacity.
The signing of a Memorandum of Understanding (MOU) on the Establishment of Bilateral Consultations between PM Wong and with Timorese Prime Minister Xanana Gusmão provides a formalized framework for the broadening of this relationship. From the second half of 2027, Timor-Leste will be designated as an approved Non-Traditional Source (NTS) country, which opens up work opportunities in Singapore’s selected sectors, such as the construction, marine, process, manufacturing, and services sectors. Another project that is intended to turn into an agreement is the collaboration between Singapore’s National University Hospital (NUH) and the Ministry of Health of Timor-Leste, which is projected to run for five years beginning in July.
PM Wong also encouraged Singaporeans to explore business and investment opportunities in Timor-Leste, stressing the need for these businesses to see the potential in the country’s “young and youthful population.” This comes as Timor-Leste seeks to diversify beyond its oil and gas industries into tourism, hospitality, infrastructure, and renewable energy. Beyond a simply transactional relationship, PM Wong also emphasized the need for businesses to tap into this emerging market to learn the local cultures and norms of the Timorese people, and to enter the space with humility through acknowledging that Singaporean businesses need to learn from the Timorese as much as Timorese do from Singaporeans.
At its core, this expanding relationship between two countries still emphasizes ASEAN Centrality, as it functions through institutional strengthening, capacity-building, and regional stability. Following the enhanced Singapore–Timor-Leste ASEAN Readiness Support Package (eSTARS), Singapore will provide more ASEAN-related programs that will support officials in Dili to assist the country through its goal of ASEAN Chairmanship in 2029. This includes tailored workshops and attachments by these officials to Singapore’s ASEAN Chairmanship. This bilateral cooperation demonstrates an instance of small-state diplomacy where Singapore positions itself more as a development partner and a bridge to ASEAN rather than as a dominant regional power.
Following the visit to Timor-Leste, PM Wong and his delegation of five ministers then visited Jakarta, Indonesia as part of the second Singapore–Indonesia Leaders’ Retreat at the invitation of President Prabowo Subianto. A few MOUs were signed, spanning carbon credits collaboration, environmental cooperation, digital cooperation, and more. This signifies the continuation of Singapore and Indonesia’s strong relationship. Eventually, Singapore’s continuous outreach to its ASEAN counterpart signifies a shift in emphasis where, as Defense Minister Chan Chun Sing mentioned during the Shangri-La Dialogue, “We are not pro-US or anti-US. We are not pro-China or anti-China. We are pro-ASEAN.”
Aini is currently pursuing a master’s degree in English literature at Nanyang Technological University. She has experience working in youth groups, contributing to the planning and management of outreach activities.
Timor-Leste 🇹🇱
The Return of Criminal Defamation Law: Concealing Structural Problems and Protecting Political Elites
by Amandina Maria Helena da Silva, in Dili
For the second time around, the government of Timor-Leste is proposing the introduction of the criminal defamation law. According to state-run news agency Tatoli, the National Parliament has set an agenda next week to begin discussing in the general phase the draft law on the seventh amendment to the Criminal Code on Criminalizing Defamation and Insult.
The proposal raised concerns among the Timorese public — among them civil society organizations, journalists, activists, and social movements — who believe that the law could affect freedom of expression and media freedom in the country. This includes silencing the people when injustice occurs and when political elites engage in various unjust practices.
According to legal expert Armindo Moniz, this law will only create discrimination in society and protect political elites. He also stressed that this law is unnecessary: it is more important to create laws that combat social problems that society faces, force corrupt officials to account for their acts, combat nepotism, and provide protection for freedom of expression in public space.
This year, the National Parliament is the proponent of this bill, which continues to talk about criminalizing defamation. In response, the non-governmental organization La’o Hamutuk affirmed rejecting the criminalization of all defamation due to the proposal that threatens freedom of expression and justice for vulnerable people. According to the organization, “We need laws that protect the rights of all, not penalize criticism or lack of access to information. Our position is that the remedy must be proportionate, civil, reparative and compatible with freedom of expression, not prison sentences that can create an intimidating effect on journalists, activists, whistleblowers, academics, affected communities and citizens.”
Besides that, the President of the Timor-Leste Journalists Association (AJTL), Zevonia Vieira, stated that this draft law may kill press freedom in Timor-Leste — there is an article that states that journalists who write or cover “suspicious” news may be charged with defamation. Coverage related to the authorities that may be taken as an insult and defamation can result in a journalist going to court, where they may be sentenced to two to three years in prison.
Through the draft law on the seventh amendment to the Criminal Code on Criminalizing Defamation and Insult proposed by parliament, the president of Timor-Leste José Ramos Horta declared that he will use his power to veto this bill to defend freedom of expression, which is an important pillar of democracy.
We can only hope that this is not merely political rhetoric, but a call to continue to promote and protect human rights that are the fundamental rights of the people.
Amandina is a human rights advocate working with Asia Justice and Rights Timor-Leste on the Interim Reparation to Women Survivors project. She previously worked with UNDP Timor-Leste’s Accelerator Lab and has contributed to human rights and health initiatives through several youth and civil society organisations. Her interests lie in justice, youth empowerment, and community-based social change in Timor-Leste.
Vietnam 🇻🇳
Grid to Grind
by Tri Vo, in Ho Chi Minh City
In a massive policy breakthrough for industry players, the Vietnamese government has officially widened the legal pathways for off-grid renewable energy. Beginning in June 2026, Decree 243/2026/ND-CP officially took effect, fundamentally altering the economics of power decentralization. The headline impact of this decree is a massive lift on the sales cap for excess electricity generated by self-produced, self-consumed rooftop solar systems, more than doubling the allowable percentage from 20% to 50% of total power generated.
Before this adjustment, factories installing vast rooftop solar panel systems were heavily curtailed by rigid regulations. If their panels produced more energy than the factory could immediately consume, especially on a Sunday or a holiday, the excess power was lost altogether. By allowing up to 50% of that surplus to be sold, and even waiving the cap entirely throughout 2030, should local power grids have sufficient capacity to absorb such surplus in a safe manner, the government has effectively provided a financial and energy lifeline for many businesses as a result.
This regulatory green light is expected to trigger a flush of corporate power purchase agreement (PPA) signings throughout Q3 and into Q4 of 2026 and even further into the future, with the direct PPA framework (as enacted through Decree 80/2024/ND-CP) now allowing large electricity consumers to bypass the state utility company EVN as the sole intermediary and to purchase electricity from private wire connections of non-state generators. These legal provisions, as a whole, have afforded industrial parks the opportunities to rapidly transform into localized microgrids, cutting down the red tape and power outages inherent in the total reliance on the national grid for many companies within. Businesses can now proactively invest in rooftop solar combined with Battery Energy Storage Systems, safe in the knowledge that excess capacity can be monetized rather than wasted.
From a macroeconomic perspective, decentralizing energy production is an urgent necessity. With the government aggressively pursuing a double-digit GDP growth ambition for the 2026–2030 period with a long-term goal to propel Vietnam into the ranks of high-income nations by 2045, power generation capacity is under extreme pressure as a result. By incentivizing the private sector to build and monetize its own capacity, Vietnam is effectively crowdsourcing the entire grid’s expansion, preserving the integrity of the national energy system from further strain, while reducing the immediate need for massive state investments in new power generation and allowing the government to reroute cash into other capital-intensive infrastructure projects.
Ultimately, lifting the 50% cap is not just an environmental policy but also an industrial retention as well as a financial strategy. The recent solar energy directives prove that Hanoi is willing to step out of the way and let the private market power contribute its fair share to the country’s growth ambition. The successful outcome of the policy will act as a stark reminder for most ASEAN peers about the viability and necessity of moving away from the single-buyer model into something far more sustainable.
Tri has experience in management consulting and strategy, having worked with institutions such as the UNDP, The Asia Group, and ARC Group. He has provided strategic, legal, and operational insights to clients in sectors including manufacturing, energy, and technology. He holds both academic and professional experience related to Southeast and East Asia, with a focus on regional development and policy.
Editorial Deadline 20/07/2026 11:59 PM (UTC +8)
