PH poised to be Asia's data center hub

Published June 1, 2021, 12:12 PM

by Emmie V. Abadilla

The global pandemic has accelerated the growth of hyperscalers and emerging data center markets, such as the Philippines, must “take advantage of this window of opportunity,” stressed Jeff Mendoza, Asia Pacific Regional Head of PLDT Enterprise.
This is while major data center hubs serving Southeast Asia, like Singapore and Hong Kong, are facing setbacks.
In Hong Kong, geopolitical risks out of the imposition of China’s National Security Law caused hyperscalers in the West to rethink their strategy of building or expanding their server farms in the country.
In Singapore, the government has issued a moratorium to freeze data center construction amid high demand in response to sustainability concerns.
Landmass shortage was also cited as another point of consideration.
“Hyperscalers are in need of options to serve the fast growing demand within region,” he reiterated.
“The digital transformation dictated by the pandemic have pushed the hyperscalers in the cloud and content provider space to step on the gas with their data center deployment plans across relevant countries,” Mendoza explained.
Already, the Philippines is one of the emerging Data Center (DC) markets, having a high growth rate alongside Malaysia and Thailand.
And the digital profile of the Philippines is motivating hyperscalers to build their infrastructure within the archipelago.
The country is home to the second-largest subscriber base in Southeast Asia, with a population of 109 Million.
It has one of the youngest median age of 25.8 years old versus the average age within the region of 31.8, pointing to a sizable tech-savvy population with stronger digital appetite and adoption to technology.
Add to that, the country has one of the highest mobile penetration rates in the region, at 138 percent.
The Philippines has 74M internet users with netizens spending 10.5 hours online, the longest across the globe.
The Philippines has been dubbed as the social media capital of the world when it comes to hours spent in social media while it ranks as 6th in the list of countries with the most Facebook users.
E-commerce sales grew by USD3.6B in 2020 at a phenomenal growth rate of 43 percent, with projections spiraling to USD12B in 2025.
From a Cloud Service Revenue perspective, Global Data has reported that the Philippines is anticipating a steep rise in cloud service revenues up to USD2.4B by 2024.
This is due to the increase in cloud spending in the Enterprise segment and the government’s Cloud First Policy which encourages and pushes the agencies to hasten their cloud adoption strategies.
The country has also been cited by the GSMA, a global mobile industry organization for mobile network operators worldwide, as an early adopter of 5G, alongside China, Singapore, and Hongkong.
Cushman & Wakefield, a reputed global commercial real estate services firm whose technology advisory group is deeply connected into the data center ecosystem, cited the Philippines’ DC Market CAGR of 14.2 percent versus the Southeast Asia’s growth average of 12.9% until 2024.
It has been noted that SEA is the fastest growing region for co-location data centres in a span of 5 years, underpinned by the rapid pace of digitalization and surge in demand for cloud based services.
UBS sees the Philippines as an underserved market with tremendous opportunity, with strong demand from domestic and international operators.
This is attributed to data localization and the demand for lower latency by the consumer and enterprise sectors.
Overall, the country is an ideal destination to support the hyperscale data center requirements of cloud and content providers.
“The Philippines is indeed a strong player in the emerging market space for globally certified data centers,” says Mendoza.
Hence, “We expect in-country DC rollouts of global technology players to accelerate,” he concluded.