Philippines has been on the radar of data center operators. Here is “why”?

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The Philippines, with a population of 113.2 Mn in 2022, is one of the most lucrative and fastest-growing economies in ASEAN. Moreover, it is also the rising Data Center market amidst the APAC Region with a high potential for growth opportunities.
At ken research, we have been closely observing the key factors that have made the Philippines, the prime location for data operators in the world. Read about them in our latest edition that answers why the Philippines has been on the radar of data center operators.

1. Philippines is the top most country in the target of data center providers in South East Asia due to it’s 67% internet connectivity and increasing young population

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Key Takeaways2

    Country # of People yet to be Online
    Indonesia 71.5 Mn
    Philippines 37.2 Mn
    Myanmar 30.8 Mn
    Vietnam 29.4 Mn
    Thailand 21 Mn
  • The internet is no longer a luxury, it is now what Filipinos depend on to earn money, study and work from home.
  • It's estimated that 15.5 Mn households in the country is contribute to the growing numbers.2
  • Philippines is the top most country in the target of data center providers in south east Asia due to it’s internet connectivity and young population.
Source: Industry Articles, Interview with Industry Experts, Ken Research Analysis 1. Statista | 2. Philippines Statistical Authority

2. The SEA’s middle-class is forecasted to expand rapidly which will not only accelerate e-commerce growth, but also drive a greater amount of data consumption and data generation

Data Center Market Attractiveness Result Matrix

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Key Takeaways

  • Manila and Vietnam (HCMC and Hanoi) stand out as two markets that are projected to be the fastest growing.
  • Excluding Singapore, which currently acts as the data center hub for Southeast Asia, the per capita rate falls to 30.4 MW per Mn. This is almost tenfold the current capacity per capita for the Southeast Asian markets which have on average only 3.1 MW per Mn capita.1
  • Current key players in these markets mainly comprise the local telcos, with a handful of regional joint ventures such as STT-Globe in the Philippines.
Source: Interviews with Industry Experts, Industry Articles, Industry Report & Ken Research Analysis | Santos : Knight Frank

3. With the emergence of smart cities, proliferation of cloud computing technologies, Philippines is one of the rising Data Center sectors amidst the APAC Region with a high potential for growth opportunities

    Country Market Stage Competition Number of Data Centers (as of) Major Regions (as of 2022)
    flag Philippines Growing Stage CAGR (2022 – 2027F): ~14% flag 26 Greater Metro Manila and Visayas
    flag Indonesia Growing Stage CAGR (2022 – 2027F): ~24% flag 531 Greater Jakarta
    flag Thailand Growing Stage CAGR (2022 – 2027F): ~9% flag 24 Bangkok
    flag Malaysia Growing Stage CAGR (2022 – 2027F): ~18% flag 443 Cyberjaya is a major hub followed by Kuala Lumpur, Johor
    flag Singapore Matured Stage CAGR (2022 – 2027F): ~8% flag 603 Eastern Singapore
    flag
    Hong Kong
    Growing Stage CAGR (2022 – 2027F): ~13% flag 434 Tsuen Wan
Source: Interviews with Industry Experts, Industry Articles, Industry Report & Ken Research Analysis |
1. Baxtel Report I 2. Data Center Journal I 3. Ironmountain I 4.Mordor Intelligence I 5. Techwire Asia I 6. Arizton I 7. ET Times I 8. Market Watch I 9. Hong kong DCI report

4. However, high data breach and the threat of cyberattacks are the few restraints in the market but it is forecasted to grow at a higher CAGR as compared to other countries

    Country Key Players Challenge Growth Drivers
    flag Philippines ePLDT, Globe Telecom, Total Information Management, PHCOLO, Beeinfotech and others
  • Monopolistic business practices by the top players, Limited offerings and low competitive pricing
  • Transition from colocation to hyperscale's, Increasing E-commerce GMV, Supportive cloud first policy and heightened need for strong data infrastructure by organizations
  • flag Indonesia Telkom Sigma, DCI, NTT, Biznet, Nusantra, Faasri Utama Sakthi, Aplikasi Lintasarta, GTN, Indonet Edge, Indokeppel, NeuCentrIX and more.
  • Connectivity, infrastructure, reliability, sustainability, competitive pricing & constrained outsourcing.
  • Low cost of operations in Cloud services is attracting the local companies
  • flag Thailand CS Loxinfo, NT Data Centers, TCC Technologies, NTT Global, True IDC, Supernap, INET and more
  • Less supply of DC space likely to lead to price competition among DC operators
  • Migration of OTT & CSP players, increasing investments from global cloud providers, favorable govt policies & emergence of disruptive technologies
  • flag Malaysia Telekom Malaysia Berhad (TM), Bridge Data Centers, AIMS Data Center, NTT Global Data Centers, VADS, Regal Orion and more
  • Accelerated adoption of data infrastructure and modernization of existing infrastructure in order to support the requirements.
  • Witnessing several new announcements and launches of new DC projects across the country.
  • Govt. aims to achieve 50% cloud adoption in cloud data centers in Malaysia by 2024.
  • flag Singapore AirTrunk Operating, BDx (Big Data Exchange, Digital Realty, Equinix, Iron Mountain, NTT Global Data Centers, Keppel Data Centers, ST Telemedia Global Data Centers and more
  • Local supply entering the market
  • Digital transformation in the country, with increase in demand for wholesale colocation services, especially from cloud service providers.
  • flag Hong Kong NTT, SUNeVision, PCCW, Telehouse HK CCC, HKEX, Grand Ming, China Mobile, Towngas Telecom, Equinix, others
  • Limited supply of land
  • Surge in adoption of cloud services and internet industry
Source: Interviews with Industry Experts, Industry Articles, Industry Report & Ken Research Analysis |

5. The upcoming Data Centers in Manila, Batangas, Pampanga, Rizal, Laguna, and Cebu region will meet the rising demand for technology adoption in the Philippines and ensure the future growth of the market.

Upcoming Data Centers Across Philippines

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A number of local and international data center operators have already pledged their investment or expressed their interest in locating in the Philippines.

  • Singapore-based SpaceDC is investing about $ 700 Mn for its 72-MW hyperscale data Center called MNL1 in Cainta, Rizal.2
  • Converge ICT Solutions is constructing its $ 19 Mn data center in Cebu to meet the demand for data requirements with the increasing digital services and transactions in the Visayas-Mindanao (VisMin)1
  • DTI also held meetings with United States based data center developers ENDECGROUP Inc. and Black and Veatch which are keen on expanding in the Philippines.

The  firms have highlighted the country’s strategic  location in the Asia-Pacific (APAC) region because  of its “existing infrastructure in  telecommunications and submarine cables,

Source: Industry Articles, Industry Report & Ken Research Analysis 1.Converge ICT I 2. Space DC
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