SMIC holding off investment in data center space for now

MANILA, Philippines — SM Investments Corp. (SMIC) is holding off for now its plan to enter the data center space while it waits for the big hyperscalers to come in to the country.

SMIC president and CEO Frederic DyBuncio said that while the company is still looking at opportunities in putting up data centers, any potential investment in the space has been deferred for the meantime.

“The data center, a lot of people who came in here and the foreigners who want to start data centers, they want to attract the hyperscalers—Googles, Amazon, Meta. But as of now, they’re really not coming in yet,” he said.

DyBuncio said that these major hyperscalers still prefer to go to countries like Malaysia and Vietnam.

“That is because they feel that the Philippines, there seems to be too much natural calamities. And our cost of power is very expensive. So most of these hyperscalers, when they come, they want that we have a plan how to convert our power to renewable. Because they really want to be also very sustainable. So it will come, but I’m not sure when that’s going to happen,” he said.

Last year, SMIC said the company is exploring the data center space to capitalize on the growing demand for data storage, especially with the rising use of artificial intelligence (AI).

“We’re looking at data centers for example because we believe that especially given the AI coming in, there’s going to be more need for servers to store all these data. That’s something we’re looking into as well to support the Philippine economy,” DyBuncio said last year.

SMIC was also previously in talks with a local partner to build “cold shells” or buildings that will house servers in an industrial park in Batangas.

DyBuncio said that the construction of the project has not yet started, but it will “most likely” commence next year.

SMIC is one of the country’s largest conglomerates, with investments in market-leading businesses in retail, banking and property. The company also invests in ventures that capture high growth opportunities in the emerging Philippine economy.

Looking ahead, SMIC is maintaining its confidence in the growth trajectory of the Philippines, with the group reaffirming its commitment to supporting the country’s economic expansion.

“We do believe that there are still a lot of areas in the country which are really—whether it be unbanked or even the need for modern trade—the opportunities are still there.  And we feel that is our competitive strength being in the country,” DyBuncio said.

“So our focus really is to really help and grow ourselves in the Philippines where we feel that we can give more to the communities and uplift the lives of the Filipinos in all of our businesses,” he said.