More business opportunities for Philippines

Another opportunity has presented itself for the country.

The Philippines is now considered one of the prime emerging data center markets in Southeast Asia and currently ranks second in the region in terms of data center growth, according to a report from property consulting firm Colliers.

Colliers revealed that a number of local and international data center operators have already pledged their investments or expressed or interest in locating in the Philippines. These include Singapore-based SpaceDC, which is investing P36.4 billion for its 72-megawatt hyperscale data center in Cainta, and Converge ICT Solutions, which is constructing its P1-billion data center in Cebu to meet increasing digital services and transactions in the Visayas and Mindanao regions.

It said upcoming data centers in the country include those of Alibaba Cloud in Manila, YCO Cloud Centers in Batangas, Dito Telecommunity in Pampanga and ePLDT Vitro in Sta. Rosa. Meanwhile, US-based data center developers Endecgroup Inc. and Black and Veatch are said to be keen on expanding in the Philippines.

Arizton Advisory and Intelligence expects the Philippine data center market to attract $635 million worth of investments by 2027 and is expected to grow at a compounded annual growth rate of 13.4 percent compared to the $298 million in 2021.

Colliers director and head of capital markets and investment services Paul Chua said the country is one of the largest early adopters of digital technology, be it for social media, e-commerce, education or financial services and with the large tracts of data needed to effectively optimize the exchange of information, the Philippines is now being touted as the next viable destination for data center operations.

These facilities, which are used by enterprises to digitally house their critical business applications and information, should be sustained by the continued rise of e-commerce transactions, emergence of smart cities, proliferation of cloud computing technologies, need for 5G connectivity, increasing financial inclusion, and the government’s push to digitize its processes, the report noted.

Colliers explained that business transformation in the last two years has pushed organizations to embrace digitization, boosting demand for data centers globally. Data from Arizton, an advisory and intelligence firm, showed that global data center investment market size reached $215.8 billion or P11.2 trillion in 2021, and is expected to reach $288.3 billion or P15.5 trillion in 2027.

The report revealed that most data centers in the Philippines are owned by telecommunication companies including ePLDT and Globe but recently, more local and international players have invested in the domestic data center market including Converge, Dito Telecommunity, Beeinfotech, Alibaba, YCO Cloud Centers and SpaceDC.

It noted that cloud computing and storage are among the primary global drivers of data center development and due to increasing remote work in the last two years, companies have started migrating their data and critical information to the cloud.

Data analytics company GlobalData projects that enterprise spending on cloud services of local enterprises will grow from P93.6 billion in 2020 to P135.2 billion in 2024. Colliers said this would likely sustain the demand for more data centers in the country.

Among the cloud computing companies planning to set up operations in the Philippines are Alibaba Cloud in Manila and YCO Cloud Centers in Batangas.

For its part, Colliers believes that the outsourcing sector should also increase the demand for cloud services as BPO companies continue to implement a hybrid work model and subscribe to the cloud computing model.

Among the top industries expected to drive demand for data centers in the country are telecom, cloud computing, e-commerce, banking and finance, hospitals, and government, which is pushing to automate processes.

Meanwhile, it said that the uptick in e-commerce utilization has also raised interest in data center operations. In fact, in 2021, data from Google, Temasek and Bain & Co. showed that the country’s e-commerce gross merchandise value grew by 24 percent year on year, this being the highest growth among major Southeast Asian economies during the period.

It is estimated that e-commerce transactions in the country will grow to P495.2 billion by 2025 from P270 billion in 2021 while another report projects e-commerce sales to reach P624 billion in 2025 from P187.2 billion in 2020. For its part, the Department of Trade and Industry expects the number of domestic online business to increase from 500,000 in 2020 to one million this year. The surge of data from online shopping and e-payment systems, Colliers said, is provoking the need for more data centers and the massive usage of social media should also support growth of data demand in the country.

New frontiers

A Filipino-owned holding company is changing the face of Guiguinto, Bulacan, and the lives of its residents as well.

Czark Mak Corp. started in the town with the development in 2017 of T12 Polo Industrial Estates, a 15-hectare property that houses warehousing facilities mostly for fast-moving consumer goods, with leasable space of 56,000 square meters.

Now, it is developing Acro City, a 10-hectare property within T12, which is now the site of a three-story boutique hotel called Acrocity Residences.

Just last week, Acrocity Residences was unveiled to the public, coinciding with the opening of Café de Margaux Bistro on the ground floor attended by a number of VIPs including Sen. JV Ejercito, Guiguinto Mayor Agatha Cruz, Bulacan 5th district Rep. Ambrosio Cruz, Baliuag Mayor Ferdie Estrella and Malolos Vice Mayor Miguel Tengco-Bautista.

Acrocity is also the home of Mt. Fuji Japanese Restaurant and will soon have a Chinese restaurant within the year.

Czark Mak chairman and president Caesar Wongchuking revealed that the group is now looking into expanding their business by developing a mid-rise residential building within Acrocity.

He explained that Acrocity Residences’ development was brought about by the need for more world-class hotels in the area. It is the biggest hotel in Guiguinto, with 102 rooms.

The growth of Guiguinto town is inevitable, especially with huge infrastructure projects like Northrail, which will pass through the nearby town of Malolos, underway. San Miguel Corp.’s ongoing international airport development is also only 10 minutes away, not to mention SMC’s MRT-7 project which will have its last station in San Jose, Del Monte, Bulacan.

Czark Mak also owns Polaris Industrial Estates in Baliuag, Bulacan, Sapporo Ice and Cold Storage and Acro Ice which has facilities in Cavite, Bacolod, Bulacan and Batangas, Nordic Atlantic Logistics Group, to name a few.

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