Foreign Direct Investment Multiplier Effects and Economic Impact Assessment of Multilateral AI Infrastructure Investment: A Case Study of Pax Silica, Philippines

This dissertation develops the first methodologically transparent economic impact assessment of the estimated US$10 billion multilateral foreign direct investment (FDI) commitment to Pax Silica, a United States-led coalition of 23 nations established in December 2025 to secure global supply chains for artificial intelligence hardware, semiconductors, and critical minerals. The coalition's flagship project is a 1,620-hectare Economic Security Zone in New Clark City, Capas, Tarlac, Philippines, managed by the Bases Conversion and Development Authority. Four analytical strands are integrated: a Leontief input–output model calibrated to Philippine Statistics Authority production structure, a structural gravity model estimated by Poisson pseudo-maximum-likelihood (PPML), a structured comparative case study benchmarked against Shenzhen, TSMC Arizona, Intel Ohio, and Samsung Taylor, and a scenario-based fiscal model discounted over a 15-year horizon. The findings are consequential. The semiconductor sector's Type I output multiplier of 1.737 exceeds the economy-wide average by 18%, yet its induced round is constrained by import leakage of roughly 50%, confirming that multiplier magnitude is real but bounded. The gravity estimates yield a negative and significant coalition coefficient (β = −0.876 to −1.109 across specifications), revealing that member states historically underinvested in the Philippines relative to gravity fundamentals—evidence that reframes Pax Silica as investment-creating rather than investment-redirecting and strengthens the additionality of the commitment. The fiscal model returns a positive central-scenario net present value of PHP 74.2 billion (US$1.31 billion) with break-even by Year 6. Comparative analysis situates the project's projected capital intensity of roughly US$53,000 per job against US$8.5–10.8 million per job for United States fabrication megaprojects, underscoring the difference between a pure fabrication plant and a diversified zone ecosystem. The study contributes a coalition-augmented extension of Dunning's eclectic paradigm, a multilateral specification of the FDI gravity model, and a replicable, publicly sourced framework for evaluating plurilateral technology-infrastructure investment.