The Philippines’ largest business group backed the government’s rejection of the United States (US) proposal to grant diplomatic property status to the planned 1,600-hectare artificial intelligence (AI) hub, drawing a firm line against concessions to secure foreign capital.

Ferdinand Ferrer, Philippine Chamber of Commerce and Industry (PCCI) president, said the country should not compromise its sovereignty to attract international projects, noting that local interests must take precedence in negotiations over the New Clark City facility.

“We don't have to give [up] our country,” Ferrer said in a chance interview when asked if the business group is concerned about developments involving the AI hub.

“Our stance there is nothing to degrade our sovereignty or anything to that effect. It should be the Philippines first,” he said.

Ferrer said this in response to the US’ push to classify the site in New Clark City as a diplomatic property, similar to how embassies are governed.

This means the site would grant unprecedented legal safeguards to US personnel, such as diplomatic immunity, which exempts certain foreign officials and personnel from jurisdiction of local courts.

Bases Conversion and Development Authority (BCDA) President and Chief Executive Officer (CEO) Joshua Bingcang told reporters last Monday, May 18, that the government had rejected the proposal during initial negotiations for the AI hub, noting that it is contrary to Philippine law.

He said the site will be treated as a regular business development contract, emphasizing that “no special arrangement [will] be accorded to the US government.”

In a subsequent interview on Business 360 on Friday, Bingcang said the US side has since clarified that it will no longer request diplomatic immunity, focusing instead only on the commercial and business aspects for incoming negotiations on the long-term framework of the site.

“[US Undersecretary of State for Economic Affairs Jacob Helberg] already laid down the arrangement on that aspect, meaning they will not be seeking immunity on the criminal or civilian laws,” he said.

However, it is important to recall that Helberg said during his visit to the site of the planned AI hub last Monday that the request would still be considered during the two-year negotiation window between the US and the Philippines over the property.

Further, Helberg noted in a post on X that the AI hub would “fuse the predictability and certainty of American law with the speed and scale of Asia,” two days after his visit.

Under the current arrangement, the Philippines has provided the site for the AI hub to the US rent-free for two years, during which both sides will negotiate the policies that will apply to the site.

Considering these developments, Ferrer said the government should reject any push for special treatment, as the proposed AI hub is “not a charity for the Philippines.”

“This is the Philippines being part of the whole value chain and development. We're not a charity, and we will never be,” he said.

The AI hub is a first-of-its-kind industrial zone under the US-led Pax Silica initiative aimed at securing the critical inputs necessary for the global AI supply chain.

So far, more than 20 companies have already expressed interest in investing, covering sectors such as advanced manufacturing, robotics, electronics manufacturing, and renewable energy.

Ferrer said the entry of these foreign companies would not harm the domestic industry, noting that it could even strengthen local firms through technology transfer initiatives.

He added that the government should ensure the development of the AI hub is accelerated before other countries follow suit and attract investments to their own hubs instead.

“Now that we have these partners who have signed up, let's do it now while the interest is still high,” he said.

If implemented properly, Ferrer said the development of the AI hub should not be limited to the current administration or even the next, to ensure that its benefits extend into the long term.