New Clark City is set to host a 1,600-hectare, industrial hub for AI-native manufacturing, semiconductor activity, and advanced technology production. It is being designated as a “Golden Node” under Pax Silica, the Washington-led initiative on building global supply chains for the AI era.
Pax Silica links allied supply chains across critical minerals, semiconductors, advanced manufacturing, transport logistics, and Artificial Intelligence infrastructure. The Philippines formally joined that initiative in April as the 13th country-signatory.
The case for joining is easy to understand. Finance Secretary Frederick Go said the Philippines would be ensuring that its mineral resources and strategic location would not just support “global industries from the margins but [would be] actively harnessed to build the industries of the future.”
The geopolitical logic is also real. Pax Silica is meant to reduce dangerous concentration in strategic supply chains and build a trusted network for the industries that will define the next several decades. Offering Clark as a hub allows the Philippines to secure place in that network.
But before we celebrate, we need to ask two questions. The first is about water. The second is about law. Both must be answered before we move ahead in New Clark City, because both go to the viability of the project itself. Golden Node may be inevitable, but conditions need to be met.
On World Water Day 2026, Department of Environment and Natural Resources (DENR) Secretary Juan Miguel Cuna warned that the Philippines faces “a challenge of water bankruptcy,” with water demand outpacing nature’s ability to replenish supply. That was not an activist slogan. That was the country’s environment secretary describing a national condition.
The warning becomes more serious when placed beside the geography of the Pax Silica project. The Philippine Institute for Development Studies (PIDS) reporting on water districts found that Central Luzon had the highest average water deficit in the country. PIDS also found that across the country’s water districts, annual demand exceeded effective supply, and that districts remained heavily dependent on groundwater.
That dependence is not a technical footnote. It is the heart of the problem. PIDS noted that groundwater extraction in the Philippines rose by an average of 3.8% a year from 2014 to 2023, and warned that over-dependence on aquifers raised the risks of saline intrusion, land subsidence, falling water tables, and long-term water-quality deterioration.
Scientific and technical studies have linked excessive groundwater extraction in Pampanga and Bulacan to land subsidence measured in centimeters per year. Satellite-based work has also found especially severe sinking in parts of Bulacan, including rates of about 11 centimeters per year. Research on the western Pampanga delta likewise tied groundwater-driven subsidence to worsening floods, tidal inundation, and saltwater intrusion inland.
Water source becomes a bigger issue in today’s economy. Just a mid-sized data center already uses around 1.4 million liters of water a day for cooling. Larger facilities can obviously use more, and the rise of AI-oriented infrastructure is pushing resource demands higher.
Semiconductor manufacturing is even more water-intensive. Policy and industry sources indicate that a large chip fabrication plant can use roughly 37 million to 38 million liters of water a day, much of it in the form of ultra-pure water. Some of that water can be recycled, but the withdrawal requirement remains massive, especially where the surrounding watershed is already stressed.
So this is the first contradiction. The region with the country’s highest reported water deficit is being positioned to host one of the country’s most water-intensive industrial bets. That is not a minor issue. If withdrawals are massive, and recycling is incomplete, then local water stress can worsen.
As for the second problem, official statements describe the “Golden Node” site as an “Economic Security Zone.” But recent reporting, most notably from the Wall Street Journal, says the proposed arrangement is expected to involve administration under US common law and diplomatic-immunity-like protections.
Those claims are too important to leave in the realm of rumor, selective leaks, or strategic ambiguity. The public needs to know what is actually in the legal instrument, if any, creating the Golden Node because the constitutional implications are obvious.
The Constitution says judicial power is vested in Philippine courts. It also says a treaty or international agreement, like a military pact, is not valid and effective without Senate concurrence by at least two-thirds of all its members. Although, Golden Node is not a military base but an economic zone.
A commercial project can route private disputes into arbitration. Republic Act No. 9285 expressly institutionalizes alternative dispute resolution (ADR) and international commercial arbitration in the Philippines. So, any issues between private parties in the Golden Node can go to arbitration in Singapore or elsewhere.
But that only sharpens the real issue: arbitration can only govern private dispute resolution. Questions about public authority, constitutionality, jurisdiction, and sovereign power do not simply disappear because parties agreed to arbitrate. With the Golden Node, whose laws will apply?
That is why the distinction matters. Existing special economic zones remain inside Philippine legal space even when they enjoy tax, customs, and regulatory incentives. They do not suspend the Constitution. If what is being proposed for the Golden Node is a “liberal” investment and arbitration framework under Philippine law, then government should say so plainly. If it goes further than this, then government should say that plainly too, and explain the legal basis.
This is not a theoretical concern. The Bases Conversion and Development Authority (BCDA) has already publicly tied the project to a two-year grace period on lease payments, treated as an unconditional in-kind contribution to support economic cooperation initiatives between the Philippines and the United States. Commitments have been made even as the legal architecture remains unclear to the public.
The Philippines has a genuine chance here to anchor itself in a strategic industrial corridor tied to semiconductors, critical minerals, AI infrastructure, and advanced manufacturing. That could strengthen exports, deepen industrial capability, and attract higher-value activity to New Clark City.
But any industrial strategy should not treat water as an afterthought. And no sovereign state should invite legal ambiguity into 1,600 hectares of strategic territory. The Golden Node is a big bet. But industrial ambition should not trump local laws and water security. We cannot drink silicon.
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council.
