Since the mid-70s, Palawan has been playing a singular role in the national nickel trade industry as a supplier of raw nickel ore, mainly to China, which in turn has been raking in the biggest share of the profit pie because of its processing capacity.
There was a significant shift in 2005 when Coral Bay Nickel Corporation partnered with Japanese industry giant Sumitomo Metal Mining to operate a hydrometallurgical processing plant in Rio Tuba, Bataraza. This allowed the company to produce intermediate products instead of merely shipping out raw soil. CBNC began producing nickel-cobalt mixed sulfide, which is refined further in Japan, mainly into battery-grade material. It is important to note, however, that the deepest profits in the production chain remained in Japan.
Nationally, an estimated 80 percent of Philippine nickel ore still leaves the country as raw or barely processed material, most of it bound for China.
Now comes Pax Silica, a U.S.-led initiative seeking to alter that supply chain and break China’s grip on the global industry.
In a statement released Wednesday, U.S. State Department spokesperson Tommy Pigott said Secretary Marco Rubio and President Marcos met in Manila to reaffirm the two countries’ alliance and discuss freedom of navigation in the South China Sea, days after the 10th anniversary of the Permanent Court of Arbitration’s landmark ruling against China’s maritime claims.
Outside the security dimension, the two leaders discussed the Luzon Economic Corridor, including the U.S. commitment of more than $100 million in new foreign assistance for infrastructure, logistics and energy projects in Subic. They also discussed the Philippines’ membership in Pax Silica and its role in hosting the initiative’s first Economic Security Zone in Clark.
Stripped of its diplomatic packaging, Pax Silica is a supply-chain alliance built to break China’s grip on critical mineral and semiconductor supply chains. Beijing controls the overwhelming majority of global rare earth refining capacity. Washington’s answer is to bring together resource-rich and technology-rich allies, with the Philippines as its 13th member, and build the infrastructure needed to process critical minerals outside Chinese-controlled supply chains.
The flagship project for Manila is a 4,000-acre Economic Security Zone in New Clark City, Tarlac, pitched as an AI-native industrial hub anchoring the broader Luzon Economic Corridor.
This is the conversation Palawan needs to enter, forcefully and early. Palawan has the ore. What it does not yet have is ownership of the upper end of that value chain or a seat at the table where decisions on investments and equity are being made.
Palawan must also reckon with the cost, particularly the ecosystem services lost through strip mining. Palawan is the country’s most biodiverse and endemism-rich province, a status that took millions of years to build.
This is not an argument for Palawan to opt out of Pax Silica. It is an argument against allowing decisions on midstream investments and equity stakes to be made without Palawan’s voice being heard.
