AI to fuel further data center growth in ’25

With companies now integrating artificial intelligence (AI) into their daily tasks, the country’s data center industry may see significant growth next year, boosted by the technical expertise of its neighbors, according to Leechiu Property Consultants.

In a recent media briefing, Leechiu research and consultancy director Roy Golez said investor confidence in the Philippine data center industry was growing.

While the Philippines currently ranks lowest in the Southeast Asian data center market with 1.81 watts per capita, Golez stressed that the country had a robust 1,364-megawatt (MW) development pipeline.

“As we move toward AI, there is really a huge need to house the information and data that we will be needing,” Golez said. “There’s AI training, a lot of AI requirements for major companies, and the Philippines is really well-positioned toward actually having substantial demand.”

READ: Only 22% of Philippine enterprises ready for AI – Cisco study

A recent study by online jobs platform Jobstreet found that nearly half of Filipino professionals use generative AI monthly in their work, exceeding the global average.

However, a separate study by Cisco Philippines showed that only 22 percent of organizations in the country were equipped to use AI.

Leechiu’s year-end report showed that the Philippines currently had 182.2 MW in data center capacity, led by ePLDT with 122 MW, Globe with 35.2 MW and other providers with 25 MW.

The National Capital Region remains the main hub for these information storage facilities, as Metro Manila presently hosts 11 data centers. Cebu province has three, while Davao, Cavite and Laguna have two each, according to Leechiu.

Huge growth potential

By next year, an additional 161 MW in capacity is expected.

On the sidelines of their media forum, Golez told the Inquirer that the Philippines would likely get assistance from South Korea, Japan and Australia in establishing its own data center empire and expanding AI capabilities.

“Although the [local data center industry] is starting low, I think it’s really going to get bigger,” Golez said. “A lot of that is not just AI, it’s all of the servers in all the companies.“

But while demand will likely increase, Golez also noted that site selection in the Philippines was “very rigid,” owing to the fact that it was a disaster-prone country.

As these facilities store vital information, data centers cannot be built near a fault line or in flood-prone areas, Golez explained.

For now, he said power and telecommunications firms had the capacity to build their own data centers, especially since energy was needed to build these facilities, while telcos would need them to expand their network coverage.