Philippines aims to be data center in region

MANILA, Philippines — The Philippines aims to become a data center hub in the region with some Western companies looking to tap the data center market in the country, according to property consultant David Leechiu.

“There is an incredible number of data centers that want to transact here. The exact number is 38 companies,” he said.

He said the Philippines is building a tremendous amount of data center capacity with the market data storage still growing. He sees demand not just in Metro Manila, but in the provinces as well.

The attractiveness of the Philippines as a data center market is likewise getting a boost from the shift in geopolitics, he said.

“There is a shift in geopolitics today. Western influence in Asia is fading to give way to other influences, so therefore Western powers are saying the Philippines is still among those with solid western influence so we should move some storage capacity there,” Leechiu said.

The Department of Trade and Industry said the Philippines is an attractive location for hyperscalers with the country leading in internet usage worldwide, while e-commerce adoption grew by 76 percent and 80 percent in 2020 and 2021, respectively.

During the press conference, Leechiu Property Consultants said that despite COVID-19, Philippine office demand reached 124,000 square meters.

“Omicron restricted mobility making it difficult to complete any transactions in the first two months of the year,” said Mikko Barranda, LPC director for commercial leasing.

But as soon as cases declined and alert levels improved, deals in the latter part of the quarter resulted in 124,000 sqm.

Moreover, active office leasing requirements likely to be concluded in the next six months surged to 358,000 sqm. representing pent-up demand.

The IT-BPM sector continued to lead demand in the first quarter, accounting for 35,000 sqm. It also registered 195,000 sqm. or 55 percent of the 358,000 sqm. of live requirements likely to be completed in the next two quarters.

“We thus anticipate in 2022 a meaningful increase over the demand numbers in 2021 as mobility is restored and the economy experiences a return to pre-COVID normalcy,” said Barranda.