By Benjamin Cuaresma
MANILA — The Philippines is looking to use its entry into the US-led Pax Silica initiative to break China’s stranglehold over one of the country’s most valuable mineral resources, with Manila’s ambassador to Washington warning that the current nickel trade leaves Filipino miners at the mercy of a dominant foreign buyer.
Philippine Ambassador Jose Manuel Romualdez said the country could finally begin processing its nickel at home instead of exporting most of its ore to China, allowing Manila to capture more value from its own natural resources while creating potentially massive investments and employment.
Romualdez said roughly 90 percent of Philippine nickel is exported to China, giving Chinese buyers enormous leverage over the prices paid for the ore.
“All our nickel is being exported to China — 90 percent of that — and they buy it at prices that they almost dictate because they have a monopoly, so to speak,” Romualdez said Monday in an interview with ANC’s Headstart.
He said Pax Silica could provide the Philippines with an opportunity to change that equation by developing domestic processing facilities and reducing the country’s dependence on the Chinese market.
“If we have something like this, this will help us be able to control the mining, get better prices for it, and be able to process it here,” he said.
Romualdez projected that the initiative could generate $200 billion to $300 billion in investments and millions of jobs over the next 20 to 30 years if the Philippines succeeds in developing a domestic critical-minerals industry.
The scale of the opportunity is underscored by shipment data. Research by Climate Rights International and Empower showed that at least 92 percent of Philippine nickel ore shipments from 2020 to 2024 went to China, highlighting the country’s extraordinary dependence on a single destination.
The Philippines is among the world’s major nickel ore exporters but remains heavily dependent on foreign countries to process the mineral.
That means much of the higher-value economic activity associated with nickel—from refining and processing to downstream manufacturing—takes place outside the country.
Pax Silica, a US-backed initiative designed to strengthen supply chains for semiconductors and critical minerals, could potentially change that by positioning the Philippines as a processing and technology hub rather than merely a source of raw materials.
But critics warn that simply moving processing onshore will not guarantee that Filipinos receive a larger share of the wealth.
Economist Cielo Magno has argued that the Philippines’ low mining taxes and royalties weaken the government’s bargaining position and could prevent Manila from securing a fair return from its mineral resources.
Scientists’ organization AGHAM has also questioned whether Pax Silica contains sufficient guarantees for technology transfer, warning that the country could remain dependent on foreign corporations for expertise and advanced technology even if processing plants are built locally.
The initiative has also triggered concerns among farmers and fishing communities over the proposed 4,000-acre technology hub in New Clark City, Tarlac.
Agricultural groups have warned that large-scale development could displace communities and threaten existing livelihoods.
The concerns have added another layer to the debate over Pax Silica: whether the program will create a genuinely Philippine-controlled industrial base or simply establish another foreign-dominated economic chain.
The issue is particularly sensitive because Pax Silica is not merely an economic undertaking.
It is also part of Washington’s broader effort to reduce China’s dominance over critical minerals, semiconductors and emerging technologies.
Romualdez admitted that the Philippines’ participation inevitably carries geopolitical consequences, despite efforts to portray Pax Silica as an economic and industrial initiative rather than an instrument of strategic competition.
Asked whether the Philippines risked being pulled deeper into the US-China rivalry, Romualdez said there was “truth” to the geopolitical dimension but rejected the notion that participation automatically meant confrontation with Beijing.
Yet he was more direct when discussing China’s activities in the West Philippine Sea.
Romualdez said the Philippines has “very little choice” but to remain closely aligned with Washington given Beijing’s actions in Philippine waters.
“Do we want to veer ourselves towards a country that wants to take over many of what is in our economic zone, or do we want a country that we have worked with in the past?” he said.
The statement underscored the increasingly blurred line between the country’s economic and security policies as Manila confronts China both in disputed waters and in critical areas of trade and resources.
Romualdez said Manila needs to move quickly if it wants to secure a major position in Pax Silica, warning that other Southeast Asian countries are also competing for investment and strategic partnerships.
He identified Vietnam, Malaysia and Indonesia as countries eager to participate and said he would not be surprised if some were already presenting Washington with more attractive proposals.
“Many countries have left us behind because they’re more aggressive. They’re more forward-looking and they do not look at the negatives right away,” Romualdez said.
The Philippines has already seen the consequences of failing to develop its mineral resources beyond raw exports.
A Senate measure that sought to prohibit raw nickel exports by 2030 was substantially weakened in June 2025 following opposition from mining industry groups.
Indonesia took the opposite approach in 2020, banning exports of raw nickel ore to force companies to process the mineral domestically. The policy attracted major investment but also resulted in significant dependence on Chinese capital and technology.
Vietnam similarly banned raw rare-earth exports in December 2025 as it sought to strengthen its own strategic supply chain.
Romualdez said the Pax Silica agreement would likely require legislation, giving Congress an opportunity to scrutinize its terms before it becomes fully operational.
He also acknowledged that he has so far seen only a broad version of the agreement, with critical details still to be negotiated.
That makes the coming congressional debate crucial.
For Manila, Pax Silica could become a vehicle for transforming the Philippines from a supplier of cheap raw nickel into a producer of higher-value processed minerals, attracting billions of dollars in capital and creating an industrial base that could endure for decades.
But unless the government secures stronger fiscal terms, meaningful technology transfer, Filipino participation and environmental and community safeguards, the country risks repeating an old pattern—exporting its resources while others capture the bigger profits.
The strategic opportunity is enormous.
So is the danger of getting the deal wrong.
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