China grip on Philippine nickel cited as reason to back Pax Silica
MANILA, Philippines — The Philippines' inclusion in Pax Silica could allow it to process its own nickel and break its dependence on China, which buys most of the country's ore at prices it "almost dictates," the Philippine ambassador to the US said.
Ambassador Jose Manuel Romualdez said Pax Silica would help the country's mining industry by shifting processing onshore instead of shipping raw ore to China, which he said holds a "near-monopoly" over Philippine nickel.
Romualdez estimates the initiative could bring $200 to $300 billion in investments and create millions of jobs over 20 to 30 years.
"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 in an interview on ANC's Headstart on Monday, August 10. "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."
At least 92% of all nickel ore shipments from the Philippines went to China from 2020 to 2024, according to research by Climate Rights International and Empower, which tracked shipment data during this period.
Pax Silica, a US-led initiative to secure semiconductor and critical mineral supply chains, has drawn sharp criticism since the Philippines formally joined the coalition earlier this year.
Farm groups have expressed concerns over the possible displacement of farming and fishing communities from the proposed 4,000-acre technology hub in New Clark City, Tarlac.
Economist Cielo Magno has warned that, while the concept of mineral processing is a step forward, the country still stands to lose from Pax Silica if the government continues to charge the lowest mining taxes and royalties in the region.
This low taxation means that despite having the resources, Manila is "unable to negotiate" a fair deal, the former Finance undersecretary has argued.
Scientists' group AGHAM has argued there is nothing in the agreement that guarantees technology transfer to Filipinos and will only lead to a dependence on foreign companies.
'Very little choice'
Asked whether Pax Silica would further ensnare the Philippines in the US-China rivalry, Romualdez said this is "a misnomer," but admitted "there is truth" to the geopolitical dimension.
"Yes, there is truth to that. But this doesn't mean that this is really a zero-sum game in the sense that if we do this, we will have a problem with China. Not necessarily," he said.
The US has been upfront about how Pax Silica is its way of countering China's dominance in the AI and semiconductor supply chain.
Still, pressed on whether the country can maintain an independent foreign policy, Romualdez said the Philippines has "very little choice" but to align with Washington, given China's behavior in the West Philippine Sea.
"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.
Romualdez said the agreement will likely require legislation, meaning it would go through full congressional debate before taking effect. He said he has only seen a "broad" version of the deal so far, with details still to be worked out.
The ambassador also sees the need for Manila to "move quickly."
Vietnam, Malaysia, and Indonesia are all eager to take on the project, he said, and he "wouldn't be surprised" if they have already offered Washington better terms.
"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," he said.
The Philippines is one of the world's top nickel ore exporters but processes almost none of it domestically. A Senate bill that would have banned raw ore exports by 2030 was gutted in June 2025 after strong opposition from mining industry groups.
Indonesia banned raw nickel ore exports in 2020 to focus on building its processing industry, but observers say this instead led to a dependence on Chinese capital and technology.
Vietnam banned raw rare earth exports in December 2025 to similarly boost its supply chain.
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