Philippines pushes AI hub, gas, and nuclear to boost investment

Marcos, Jr said the proposed Pax Silica project, an initiative which the Philippines joined along with Singapore, South Korea, Japan, and India, will create an ecosystem centred on AI. The Philippines is drawing attention for its nickel, copper, chromite, and cobalt reserves, which are essential critical minerals for stainless steel, electrical wiring, high-strength metal alloys, and rechargeable batteries. 

“It will bring quality jobs to our people, accelerate our industrial competitiveness, and revitalise our economy,” Marcos, Jr said in an annual address before government officials and diplomats, outlining his administration’s priorities for the next 12 months.

“As a strategic component of the Luzon Economic Corridor, the hub will be an advanced manufacturing and logistics center in the global AI and technology value chain,” he said, referring to the proposed international infrastructure and economic development corridor which includes New Clark City in Clark, Pampanga, where the potential AI and semiconductor hub is set to be built. 

Pax Silica has drawn criticism recently, mainly over fears that the hub in New Clark City will worsen water insecurity, as data centres require vast amounts of water for cooling. Opponents also warn it could strain electricity supplies and harm farmers and Aeta communities if local resources are diverted.

President Ferdinand Marcos, Jr delivers his state of the nation address in Batasang Pambansa in Quezon City on 27 July, 2026. Image: Presidential Communications Operations Office

In his 140-minute speech, the president also highlighted the new gas find near the existing Malampaya gas field, the country’s primary source of indigenous natural gas and a vital contributor to Luzon’s power supply.

Marcos, Jr said drilling resumed for the first time in eight years after the service contract was extended to 2039, as the government steps up efforts to boost energy security and advance plans to position the Philippines as a liquefied natural gas (LNG) trading hub in the Asia Pacific region.

He said the field had yielded an untapped reserve of 222 billion cubic feet of natural gas, enough to power 1.6 million households for eight years, and called it a “national treasure” that could keep the country’s premier gas field producing until 2034.

He also announced how it may be time to revisit nuclear energy, arguing it could improve energy security and lower electricity costs, drawing unusually loud applause from lawmakers and other officials in the chamber.

The Department of Energy has already declared plans to hold the country’s first nuclear energy auction, with draft guidelines outlining staggered delivery from 2038 to 2047.

Nuclear is cited in the Philippine energy plan as a baseload power source that can meet the country’s electricity demand reliably without emitting greenhouse gases. 

The Southeast Asian nation has been ramping up talks to push through nuclear power deals, despite safety and cost concerns cited by environmentalists. Marcos, Jr met three years ago with a US-based nuclear energy firm to assess if the Philippines could be a potential project site, followed by forging an agreement with South Korea to conduct a feasibility study to explore the revival of the stalled Bataan Nuclear Power Plant. 

President Ferdinand Marcos, Jr conducted an aerial inspection of the Malampaya gas field  on 23 July while en route to Palawan. Image:Presidential Communications Operations Office

AI hub and nuclear face backlash as gas doubts loom

Some civic groups are concerned that the government’s push for the Pax Silica initiative and a nuclear revival risks deepening climate and resource pressures rather than delivering inclusive development.

Aksyon Klima, a non-profit network of 40 civil society organisations like Greenpeace Philippines, WWF Philippines, and the Manila Observatory, said that the government should pay more attention to the needs of vulnerable communities, including access to food, water and affordable electricity, while protecting forests, oceans and livelihoods. It urged policies that build long-term resilience rather than short term fixes driven by technocratic or foreign interests. 

“For an administration that seems to be embracing AI and data-based decision-making, it is ironic and frustrating to see them misread, if not simply ignore, the clear evidence right in front of them: what is needed by our vulnerable communities,” the organisation said in a statement.

Filipino communities call on President Ferdinand Marcos, Jr to align the country’s growth agenda with climate resilience, as they face worsening climate impacts like extreme heat. Image: Greenpeace Philippines

The Asian Peoples’ Movement on Debt and Development (APMDD), a regional alliance of peoples’ movements, community organisations, coalitions, nonprofits, and networks across Asia and the Pacific, also criticised the Department of Energy’s draft tender rules for pioneer nuclear power plants, saying they favour private profits over consumer protection and renewable energy progress.

APMDD warned that while nuclear is being pitched as a solution by 2035, the proposed framework could lock the Philippines into expensive power and saddle taxpayers with multi-billion-peso liabilities.

The network cited banchmarks from the International Renewable Energy Agency (IRENA) and US-based investment bank Lazard, which showed that new nuclear power costs US$140 to US$220 per megawatt hour – up to three times more expensive than firm solar and wind with storage.

Beyond the economic risks, APMDD said the serious physical dangers of nuclear power are especially real in a country like that Philippines, which is an archipelago on the Pacific Ring of Fire, exposed to earthquakes, fault lines and super typhoons. Siting reactors and storing radioactive waste in these conditions carries catastrophic risk, especially with proposals to locate plants in coastal provinces such as Bataan, Masbate or Palawan, the group warned. 

“Even newer designs like small modular reactors do not solve the core problem of radioactive waste, and some may produce even more waste per unit of electricity. Urban areas may use most of the power, but rural and coastal communities would shoulder the risks, pollution and long-term waste burden. Without a permanent deep geological repository, host communities could become de facto radioactive dump sites,” they said. 

Questions are also mounting over the government’s growing reliance on natural gas as a transition fuel, even as a 2024 University of the Philippines study found natural gas serves to be an economically viable and necessary transitional bridge away from coal while renewable energy sources like solar and wind were still relatively costly and intermittent, making them harder to deploy as reliable baseload replacements.

However, Dante Canlas, professor emeritus at the UP School of Economics, who co-authored the report, said that the study “needs to be revisited” as the government has announced discovery of new gas wells since then.

“We don’t know the status of the energy security goal of the government. We had hoped that making renewables price competitive was going to be accelerated cutting short the interim period for gas. We have no information if this is happening,” Canlas told Eco-Business.

Environmental groups have warned that the discovery of the new offshore gas deposit near the biodiversity-rich waters of Palawan risks locking the Philippines into fossil fuel dependence and could threaten marine ecosystems that have yet to be properly assessed. That concern is sharpened by the fact that gas, while cleaner than coal, still prolongs the country’s dependence on fossil infrastructure.

Flood control scandal revisited

Marcos Jr. had earlier opened his address by saying his administration had already begun pursuing the key figures behind the 2025 flood control scandal, which involved alleged kickbacks, ghost projects and the misuse of public funds, with charges and arrests now under way against contractors, senior officials and even legislators.

He first raised the issue in his SONA last year, and later ordered an independent commission to investigate the alleged irregularities, which have since dominated Senate hearings and fueled public outrage.

Witnesses in those hearings have alleged that payoffs were made to lawmakers in exchange for project approvals, and several politicians, including the president’s cousin, former House Speaker Martin Romualdez, have been linked to the probe.

Marcos then signaled that more cases are imminent, including those against Romualdez.

“The filing of multiple cases against the former speaker is imminent. Even though it hurts me, the right thing to do must be done. I am not the president of my family. I am not the president of my friend,” he said.

Marcos also used the speech to defend his transport and energy policies, saying drivers who shifted to hybrid and electric vehicles (EVs) were spared the impact of the recent fuel price spike. He said the government had removed tariffs on EV imports until 2028 and ordered agencies to prioritise low-carbon transport when replacing their fleets. The goal, he said, is to build local EV industries and have half of all vehicles in the country running on electricity by 2040.

He added that the country must also improve waste disposal, urging Congress to update the 25-year-old Ecological Solid Waste Management Act to include waste-to-energy and waste treatment technologies. The government has already approved the country’s first large-scale waste-to-energy facility in New Clark City.