America’s Anti-China AI Hub Is Rising
On the Government That Built 421 Ghost Flood Projects.
The first physical node of America’s anti-China AI supply chain now has an address. On April 20, 2026, the State Department’s Pax Silica initiative designated 1,619 hectares — about 4,000 acres — at New Clark City, a master-planned metropolis in Tarlac province north of Manila, as its first “Golden Node”: an “AI-native” Economic Security Zone. Foxconn was confirmed as the anchor tenant on July 7. Roughly 20 American investors are circling, according to Wall Street Journal reporting. Both governments say they intend to sign a framework agreement before the end of the year.
Six months before that designation, the host country’s own Department of Public Works and Highways confirmed that 421 of roughly 8,000 flood-control projects it had inspected were “ghost projects” — budgeted, awarded, and paid for, but never built. A later review trimmed the list to 416. Roughly 100,000 more projects remain unvalidated. The Philippine Department of Finance estimates the flood-control anomalies cost the economy as much as $2 billion. Seven people have been detained, two cabinet secretaries have resigned, and the special commission created to investigate all of it was dissolved on March 31 — three weeks before the Golden Node announcement.
A Washington Examiner op-ed published today by Luther Saturion — a Filipino high-school senior and student columnist, a byline this page discloses up front — put the two ledgers side by side. The facts beneath the op-ed stand on primary documents, and they raise a question aimed not at Manila but at Washington: the administration of President Donald Trump (R), with Commerce Secretary Howard Lutnick (R) running the export-control machinery and Under Secretary of State Jacob Helberg (R) as the initiative’s architect, chose this ground for the flagship node of a roughly 35-nation strategy. The bet is theirs to defend.
- 421 → 416 — ghost flood-control projects confirmed by the DPWH on Oct. 9, 2025, out of ~8,000 inspected — trimmed to 416 after ICI de-duplication · Source: Philstar; Inquirer
- ~$2 billion — the top of the Department of Finance's estimate of economic losses from the anomalous projects (₱42.3B–₱118.5B), 2023–25 · Source: BusinessWorld
- 4,000 acres — the 1,619-hectare 'Golden Node' AI zone designated at New Clark City on April 20, 2026, anchored by Foxconn · Source: BCDA
- ~35 signatories — Pax Silica partners after the June 2026 second summit, including the European Union — up from 8 at the December 2025 launch · Source: U.S. State Department
- $250 million — the proposed Pax Silica fund pitched to seed projects like the New Clark City node · Source: U.S. State Department
What Washington is betting: the first physical Golden Node of its anti-China AI strategy — 4,000 AI-native acres, a Foxconn anchor, roughly 20 American investors, a proposed $250 million fund, and the credibility of a ~35-nation initiative — on a framework deal both sides want signed this year.
What the partner’s auditors found: 421 ghost flood-control projects (later trimmed to 416) out of ~8,000 inspected, with ~100,000 projects still unvalidated; up to ~$2 billion in estimated economic losses; seven people detained; two cabinet secretaries resigned; and the anti-corruption commission investigating it all dissolved on March 31, 2026 — three weeks before the Golden Node was announced.
Pax Silica launched on December 12, 2025, at an inaugural summit of eight nations — the Trump administration’s plan to build an allied supply chain for artificial intelligence, from chips to minerals to data centers, outside Beijing’s reach. Helberg, the initiative’s architect at the State Department, has described its Golden Nodes as the physical proof of concept: zones where allied capital, American technology, and partner-country land meet under — in his own framing — the rule of law.
“The Golden Node is not about recreating the factories of the last century. It is about building the manufacturing ecosystems of the next century — AI-native from day one, anchored in the rule of law…”
Under Secretary of State Jacob Helberg, at the New Clark City designation, per the BCDA
The Philippines joined in April 2026 as the initiative’s 13th partner, and the payoff came fast. On April 20, Helberg stood with Philippine Finance Secretary Frederick D. Go and Joshua Bingcang, president of the state-run Bases Conversion and Development Authority, to designate New Clark City as the first Golden Node — sweetened with a two-year lease grace period for early locators. In May, Helberg toured the site alongside Foxconn executives; by July 7, the Taiwanese electronics giant was confirmed as the zone’s anchor. Saturion’s op-ed adds one more inducement: an estimated $1 trillion in untapped mineral reserves nearby — a figure that appears in the op-ed, not in any government audit this page reviewed.
Every element of that pitch — the acreage, the anchor tenant, the investors, the rule-of-law framing — now rests on what the partner government’s own auditors spent the past year documenting.
The unraveling began with the host government itself. In his July 28, 2025 State of the Nation Address, President Ferdinand Marcos Jr. flagged “anomalies” in the country’s flood-control program. Two weeks later his office put numbers on it: of the 2,409 contractors who shared ₱545.6 billion — about $9.5 billion — in flood-control spending between July 2022 and May 2025, just 15 firms captured roughly ₱100 billion, nearly a fifth of the entire budget. That figure describes the concentration of the overall flood-control budget, not the value of the fake projects — a distinction this page maintains throughout, because the ghost projects’ total value has never been officially disclosed.
On October 9, 2025, Public Works Secretary Vivencio “Vince” Dizon announced the finding that gave the scandal its name: 421 of roughly 8,000 flood-control projects inspected — validated jointly with the defense department, armed forces, national police, and the national development authority — were ghosts. Most were in Luzon, the island where New Clark City sits. The Independent Commission for Infrastructure later trimmed the list to 416 after removing duplicates. Roughly 100,000 projects nationwide had still not been validated.
The costs and consequences accumulated through the fall. The Department of Finance estimated economic losses from the anomalous projects at ₱42.3 billion to ₱118.5 billion — as much as $2 billion — for 2023 through 2025. On November 19, Executive Secretary Lucas Bersamin and Budget Secretary Amenah Pangandaman resigned as the scandal reached the presidential palace. Five days later, Marcos announced that seven people had been detained, with 9,855 projects worth more than ₱545 billion under investigation. Among those charged: contractor Sarah Discaya, accused by the Ombudsman over a ₱96.5 million ghost project in Davao Occidental. She, like every defendant in the pending cases, is presumed innocent unless and until convicted.
Two details in the deal’s paper trail suggest Washington understood exactly what it was building on. The first is what its own negotiators asked for. According to Wall Street Journal reporting picked up across the region, the United States sought to have the New Clark City zone governed by American common law and to extend diplomatic immunity to zone investors — an extraordinary request that Manila flatly refused in mid-May as an affront to its sovereignty. The ask failed, but it is revealing: the architects of a “rule of law” zone did not trust the partner’s legal system enough to leave their own investors inside it. Those roughly 20 American investors will now operate under the same procurement and legal machinery that produced the ghost projects.
The second detail is timing. The Independent Commission for Infrastructure — created by Executive Order 94 in September 2025 and chaired by retired Justice Andres Reyes Jr. — had prioritized just 80 of the 416 ghost projects for investigation, the cases involving the top 15 contractors, when it ceased operations on March 31, 2026. Three weeks later, the Golden Node was announced. The commission’s caseload passed to other agencies; the procurement machine it was built to investigate remains.
“I've watched this pattern my whole life… nothing structural changes, and eventually a new scandal replaces the old one.”
Luther Saturion, student columnist, Washington Examiner op-ed, July 12, 2026
None of this has slowed the sales pitch.
Announced the 2026 Pax Silica Summit deliverables: the US and nearly three dozen partner economies signed a Joint Statement on AI Opportunity, ten additional partners signed the Pax Silica Declaration, and a pilot AI assistance project was announced for Panama.
The strategic logic of Pax Silica is real, which is what raises the stakes. The initiative grew from eight signatories at its December 2025 launch to roughly 35 — including the European Union — by its second summit in June 2026, and a proposed $250 million fund has been pitched to seed projects like New Clark City. The White House’s AI power center has meanwhile churned: David Sacks, the administration’s former AI czar, stepped down on March 26, 2026, leaving Lutnick’s Commerce Department carrying much of the export-control machinery the strategy depends on.
A proposed $250 million Pax Silica fund would seed trusted technology infrastructure across partner nations — building the secure, allied AI supply chain of the future.
Nor is everyone in Washington comfortable with how the strategy is being run. Rep. John Moolenaar (R-MI), chairman of the House Select Committee on the Chinese Communist Party, warned the Commerce Department during its review of Nvidia chip sales to China that loosened export guardrails could undercut the entire effort.
“Strengthen China's military capabilities, suppress citizens and threaten U.S. innovation.”
What loosened guardrails could do, per Rep. John Moolenaar (R-MI), Chairman, House Select Committee on the CCP
That is the frame in which a compromised flagship node matters. China’s Belt and Road Initiative spent a decade littering partner countries with white-elephant infrastructure and unpayable debt, and Pax Silica was pitched explicitly as the clean alternative — allied, transparent, anchored in law. If the initiative’s first physical node becomes entangled in the procurement culture that produced 416 ghost projects, Beijing acquires a propaganda asset worth more than any single chip ban: proof that Washington’s rule-of-law bloc cannot tell the difference between a data center and a facade.
None of this means the bet is irrational. The Philippines is a treaty ally, the geography is strategic, and Manila’s decision to audit its own flood-control program — publicly, with arrests and cabinet resignations — is more self-scrutiny than many of Beijing’s partners have ever displayed. But the American officials who chose New Clark City did so with the ghost-project ledger already published, the corruption commission already dissolved, and their own jurisdiction request already refused. They own the outcome either way.
The State Department planted the first physical node of America’s anti-China AI strategy — 4,000 acres, a Foxconn anchor, roughly 20 American investors, and the credibility of a ~35-nation initiative — on a government whose own auditors confirmed 421 ghost flood-control projects, later trimmed to 416, with up to $2 billion in estimated losses and roughly 100,000 projects still unvalidated. Washington’s negotiators trusted the partner’s legal system so little they asked for American law and diplomatic immunity inside the zone — and were refused. The corruption commission dissolved three weeks before the deal was blessed. If the Golden Node succeeds, the bet looks visionary. If it fails, the Trump administration will have built Beijing’s best talking point with American capital.
