Philippines Rejects U.S. Proposal for Jurisdiction Over 1,260-Hectare Zone

The United States and the Philippines are nearing a deal on a long-term framework to establish an economic security zone on Luzon Island, according to a senior Trump administration official. The initiative is part of Washington’s Pax Silica program, aimed at creating a secure technology supply chain for allied nations.

The two countries have agreed to jointly establish a 1,620-hectare Economic Security Zone located in New Clark City. This site is situated near the former U.S. Clark Air Base, which closed in 1992. According to the U.S. State Department, the zone is designed to serve as a staging point for a purpose-built platform for allied manufacturing and to surge the production of inputs that are vital to U.S. Supply chains.

Pax Silica and Technology Alliance

The economic security zone is a key component of the Pax Silica initiative, a technology supply chain alliance established in December 2025. The alliance focuses on securing critical minerals, data infrastructure, computing, and advanced manufacturing.

In April 2026, the Philippines became the 13th country to join the alliance. The partnership seeks to reduce reliance on external providers for essential technology inputs, particularly those over which China currently maintains tight control.

Jurisdiction Disputes and Negotiations

Despite the progress toward a deal, negotiations have faced friction regarding the legal status of the zone. Philippine officials recently rejected a U.S. Proposal that would have placed a 1,260-hectare zone under United States jurisdiction.

U.S. Under Secretary of State for Economic Affairs Jacob Helberg has indicated that the two allies are currently determining sectoral industrial priorities to define the specific types of economic activities that will be permitted within the zone. Helberg suggested that U.S. Companies operating within the facility would be granted access to essential inputs, such as critical minerals.

Diplomatic Engagement and Outlook

Under Secretary Helberg visited the proposed site in New Clark City during the week of May 18, 2026. He was accompanied by representatives from more than a dozen U.S. Entities during the visit.

In an interview with Reuters published on May 21, 2026, Helberg expressed confidence in the timeline for the agreement.

I expect the United States and the Philippines to reach a deal sooner rather than later. There’s an enormous amount of momentum behind this.

Jacob Helberg, U.S. Under Secretary of State for Economic Affairs

The establishment of the zone is intended to strengthen the U.S.-Philippine alliance by integrating the Philippines more deeply into the Western technology manufacturing ecosystem. The focus remains on establishing a stable and secure flow of critical minerals and high-tech components to mitigate supply chain vulnerabilities.