Hyperscaler industry seen as PH’s next growth engine

Published September 2, 2022, 1:12 PM

by Bernie Cahiles-Magkilat

Trade and Industry Secretary Alfredo S. Pascual projected that the hyperscaler industry will be the next growth engine of the Philippine economy, adding that the country is on track to become hyperscaler hub in Asia Pacific.

The promising prospect and competitive advantage of the Philippines as the next investment destination for the hyperscaler and data center industry were highlighted during a webinar held by the Board of Investments (BOI), through its International Investments Promotions Service (IIPS), and the Philippine Trade and Investment Center in Hong Kong.

In the event, Pascual underscored that the Philippines is ready to be the next hyperscaler hub in the Asia Pacific. “We believe that the hyperscalers industry will be the next growth engine of the Philippines. We are keen on helping hyperscalers cloud services and start-up ecosystem in the Philippines,” he said.

“We hope that you find these opportunities as promising as we do with your trust and passion. Let us make hyperscaler investments and partnerships happen in the Philippines,” Pascual emphasized.

Pascual explained that as the Philippines is gearing to be the next hyperscaler hub in the Asia-Pacific region, many opportunities for investments and partnerships await the hyperscaler and data center firms who want to invest in the country, especially from the companies in Hong Kong and China.

Victor Aliwalas, vice-president and technology management advisor of the PLDT Enterprise, shared that the Philippine data center market is ripe for digital and bullish growth prospects.

In 2022, he said, the Philippines is expected to lead the technology spending growth in Asia, ahead of Vietnam and Malaysia. Aliwalas also highlighted the Jupiter Cable System, the newest trans-Pacific cable facility connecting the Philippines to the USA and Japan. With a network distance of 14,866 kilometers, it is the fastest cable system between the Philippines and the US with 126ms latency between Daet, Camarines Norte, and Los Angeles, California.

Other officials who pitched for the country’s standing as the next hyperscaler hub was Consul General in Hong Kong Raly L. Tejada, who highlighted the growing data center capability of the Philippines.

Undersecretary Rafaelita M. Aldaba of the DTI – Competitiveness and Innovation Group presented the value proposition of the Philippines for the hyperscalers as well as the numerous government initiatives for the firms.

According to Aldaba, the Philippines has a thriving digital economy landscape with strong macroeconomic fundamentals that will continue to attract positive investment prospects. In addition, she said the Philippines is an early adapter of 5G technology in the Asia Pacific, according to Moody’s, along with Hong Kong, Singapore, and Malaysia.

Aldaba also pointed out that the Philippines has a “demographic sweet spot” because of its rich talent pool of 46.5 million workforces, and the country is producing an average of 750,000 graduates annually. With the amended PSA, the official said, the government is allowing 100 percent foreign ownership in the country’s telecommunications industry.

Meanwhile, the Philippines as a high potential market was attested by two of the leading hyperscaler companies in Hong Kong and China.

Paul Lai, senior vice president, in-country project investment of HGC Global Communications, Ltd., and Allen Guo, Country Manager of the Alibaba Cloud Intelligence – Philippines, both affirmed the country’s readiness as an ideal investment location, citing its resilient economy amid the pandemic, its “welcoming regulatory environment”, particularly with the passage of the amended Public Service Act (PSA) and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, coupled with the Philippine businesses increasingly relying on cloud-based IT solutions for growth.