The Philippines Data Center Market is Expected to Reach $600 Mn by 2027: Ken Research

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The Philippines a country located in southern Asia has witnessed remarkable growth in the field of data center market. With 84.6 Mn smartphone users currently the data market revenue of the country is at an all-time high. The Philippines currently have a total of 26 data centers and it’s expected to grow more in the upcoming years.

Story Outline

• The Philippines has emerged as one of the fastest-growing markets for data centers in the whole of Southeast Asia in recent years. Its data center market is expected to grow at double CAGR in the upcoming years.
• Manila capital of the Philippines is the main and most important region of the Data Center Market in the country.
• Philippines is embracing digitalization by receiving assistance from cloud providers like Amazon web services, Google, and Tencent Cloud

1.Easy access to the internet is the reason behind the growing data center market.

• Almost 67% of the Philippines population has access to the internet which results in 76 Mn active internet subscribers as of 2022.
• The internet subscribers of the Philippines are supposed to be 92 Mn in 2027 whereas smartphone users will rise to 93 Mn.
• This rapid change in digitalization will further enhance the data center market of the Philippines and will attract more and more investors to the market.

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As per Ken Research, the Philippines data center market is expected to reach ~ 600 Mn USD by 2027 owing to reasons like heavy internet penetration in the country and a wave of digitalization. Currently, the market is growing at a CAGR of 7.9% between 2018 – 2022.

2.Digitalization in the country influencing the data center revenue

• Filipinos are considered the heaviest users of the Internet and social media in Southeast Asia which is one of the factors why the data center market is growing rapidly in the region. Currently, the Internet penetration rate is ~73.1% in the country.
• Digital payments are also one of the major contributors to growth in the data center market of the Philippines. When it comes to making online payments around 23% of male and 26% of the female population have actively used digital modes of payment in 2022.
• As of 2020, almost 25 Mn local population was using mobile wallets for digital payments. Domestic companies like GCash and Maya were leading this market in the Philippines. Around ~26% of retail transactions were recorded in the year 2020. In 2021, 61 Mn users of digital payment methods were recorded in the country.
• In the year 2019, the central bank of the Philippines “The Bangko Sental ng Pilipinas” launched QR PH for peer-to-peer (P2P) payments. Just three years later in 2022, users of this payment method increased by 70 percent. Heavy internet penetration and a wave of digitalization are some of the major reasons behind this huge jump in P2P payments.

3.Key Players of the Data Center Market of the Philippines

• ePLDT, Globe Telecom, Total Information Management, PHCOLO, Beeinfotech, and others are the major players in the data center market in the country.
• ePLDT is the market leader with the highest market share. At the moment, ePLDT has 10 world-class data centers across the country and rules more than half of the data center market.
• In addition, the firm is planning to launch its 11^th and most advanced data center in 2024 with a 50 Mw capacity. President and CEO of ePLDT Victor S. Genuino recently disclosed plans for the company to establish a 12th data center facility in the nation.

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4.Future of the Data Center Market in the Philippines

• The market is further projected to witness major investments by new entrants. It is estimated that by 2028, the data center market of the Philippines is trying to double its data center market capacity by increasing the number of data center facilities.
• Leading player of the market ePLDT is planning to launch its 12^th data center in the region with a capacity of 100 Mw.
• Philippines as a data center market is on its path to digitalization and cloud providers like Amazon web services, Google, and Tencent Cloud are assisting and helping the country in this transformation.

5.Major Government Initiatives for the Data center market in the country

• One of the major factors behind the growth of the data market industry in the Philippines is the supportive cloud policy by the organizations.
• The pandemic of Covid-19 has also forced businesses to shift towards digitalization in recent years.
• Growth of the e-commerce sector and investments of foreign players like Beeinfotech and Alibaba has also enabled the market to grow significantly. Alibaba has committed to invest around $1 Billion to develop the Philippines’ digital pool in the next three years.
• On the other hand, in 2022, Beeinfotech launched a data center facility in the Philippines with an investment of around $100Mn to boom its cloud services in the region.

Conclusion

The Philippines is a growing market for the data center in southeast Asia and the development of the data center market in the country in recent years is showing that it can become a hub of data centers. With 84.6 Mn smartphone users and 76 Mn active internet users shows how fast the country is heading towards digitalization. The wave of digitalization will help the country to enhance its strength of data centers in the coming years. Along with current market players data center market of the Philippines is expected to receive huge investments from foreign investors also in the next five years.