Report Overview

Philippines Data Center Market – Industry Trends & Forecast Report, 2030

Philippines Data Center Market size was estimated at USD 659.1 million in 2023. During the forecast period between 2024 and 2030, Philippines Data Center Market size is projected to grow at a CAGR of 14% reaching a value of USD 1,642.11 million by 2030. Prominent drivers of the market include the country's cloud-first strategy, a favorable business environment, and a strong regulatory framework, making the Philippines an attractive investment destination. The sector is increasingly adopting renewable energy, exemplified by SpaceDC’s MNL1 data center in Manila, which will operate entirely on geothermal and wind power. This shift aligns with rising digitalization and increased data usage. Government initiatives, including the establishment of free trade zones such as the Freeport Area of Bataan and Clark Freeport, are expected to further boost development. Additionally, the Department of Energy’s 2020-2040 Power Development Plan aims to increase renewable energy’s share to 35% by 2030, with a target of 50% by 2040.

Data Center – Overview

A data center is a facility used to house computer systems and associated components, such as telecommunications and storage systems. It typically includes servers, data storage systems, networking equipment, and power supplies, all designed to manage and store large volumes of data and ensure high availability and reliability of digital services. Data centers support critical applications and services by providing the infrastructure needed for data processing, backup, disaster recovery, and networking. They are equipped with cooling systems, security measures, and redundancy features to maintain operational efficiency and protect against data loss or downtime.

Philippines Data Center Market

Growth Drivers

Increasing Internet of Things (IoT)

The increasing adoption of the Internet of Things (IoT) is driving substantial growth in the data center industry. As more devices become interconnected, there is a heightened demand for robust data processing and storage capabilities. IoT technologies generate vast amounts of data that require sophisticated infrastructure to manage effectively. This surge in data volume and the need for real-time analytics are pushing businesses to invest in advanced data centers that can handle and process the influx of information. The evolution of IoT is a key factor in the rising need for scalable and resilient data center solutions, reflecting its significant impact on the industry.

Growing Government Initiatives

The rapid expansion of the Philippines' data center market is significantly propelled by the country's strategic government initiatives, which are vital in shaping a favorable environment for digital infrastructure growth. The Philippine government has actively championed the development of data centers through a series of supportive measures, including the National Broadband Program and the Digital Philippines campaign, aimed at enhancing digital connectivity and infrastructure. The recent amendments to the Foreign Investments Act further bolster this momentum by simplifying regulatory processes and attracting foreign investment. President Ferdinand Marcos Jr.'s advocacy for digitalization underscores the administration's commitment to closing the digital gap and fostering a robust data center industry. These initiatives, combined with tax incentives and streamlined regulations, create an attractive landscape for data center operators, driving a significant increase in capacity and investment. As a result, the Philippines is poised to emerge as a leading hub for data centers in Southeast Asia, reflecting the transformative impact of strategic government support on the market's explosive growth.

Challenges

Land Availability

The expansion of data centers in the Philippines faces a significant challenge in terms of land availability. As the demand for data center space continues to rise, acquiring large and strategically located parcels of land becomes increasingly difficult. This scarcity of suitable land, particularly in densely populated urban areas, poses a substantial hurdle for data center operators. The limited availability of land affects their ability to expand infrastructure and accommodate the growing needs of the digital economy, potentially constraining the overall growth of the data center sector.

Power Issues

Power supply constraints represent a critical restraint for the data center industry in the Philippines. The sector relies heavily on a stable and reliable power source to ensure uninterrupted operations. Current estimates suggest that the ICT sector will need between 300 to 500 MW of reliable baseload capacity by 2026, in addition to the conventional capacity required to support economic growth. Presently, the Philippines' power infrastructure is inadequate, with data centers operating at less than 100 MW of total capacity. Addressing these power supply challenges is crucial for supporting the anticipated growth in the data center market and attracting further investment, as unreliable power sources can delay or hinder the expansion of data center operations.

Impact of Escalating Geopolitical Tensions on Philippines Data Center Market

Escalating geopolitical tensions among countries and spreading across regions could have a significant impact on the growth of Philippines Data Center Market. Increased geopolitical instability often leads to heightened concerns over data security, which can deter foreign investments and slow market growth. Additionally, disruptions in global supply chains may affect the availability of critical infrastructure and technology components. As companies become more cautious, there could be delays in data center development projects and a potential rise in operational costs. However, the Philippines' strategic location in Southeast Asia and growing demand for digital services might continue to attract investments, albeit with a more cautious approach due to the current geopolitical climate.

Philippines Data Center Market

Segmental Coverage

Philippines Data Center Market – By Service Model

On the basis of service model, Philippines Data Center Market is bifurcated into Co-location and Managed Services segments. The co-location segment holds a higher share Philippines Data Center Market by service model. Colocation data centers offer businesses shared facilities for housing servers, networking equipment, and other hardware. Managed by third-party providers, these facilities provide access to established infrastructure—such as connectivity, power, cooling, and physical security—without the significant investment needed for building and operating proprietary data centers. This cost-effective approach is particularly appealing to small and medium-sized enterprises that may lack the resources to construct their own facilities. Furthermore, colocation centers typically follow industry best practices and compliance standards, which is crucial for businesses in regulated sectors like banking, healthcare, and government. With growing demand for dependable, scalable, and affordable data center solutions, colocation data centers are poised to continue dominating the Philippines market during the forecast period.

Philippines Data Center Market – By Classification

Based on classification, Philippines Data Center Market is divided into Tier 1, Tier 2, Tier 3, and Tier 4 segments. The tier 3 segment holds the highest share in Philippines Data Center Market by classification. Renowned for their high availability and reliability, Tier III data centers are favored by businesses with critical IT infrastructure needs. As cloud services, online transactions, and essential operations increasingly rely on digital infrastructure, the demand for Tier III data centers grows due to their superior uptime of 99.982%, compared to Tier I’s 99.671%. This reliability minimizes the risk of downtime, which can lead to customer dissatisfaction, reputational damage, and substantial financial losses. Additionally, the Philippine government’s regulations on security and environmental standards make Tier III data centers a more compliant and secure option for companies and government entities. With factors such as rising internet usage, growing cloud adoption, and supportive government policies driving the industry’s expansion, Tier III data centers are solidifying their dominance in the market.

Competitive Landscape

Major players operating in Philippines Data Center Market include Epldt Inc, GTI Corporation, NTT Ltd, STT GDC Pte Ltd, Zenlayer Inc, Bitstop, Dataone, Space DC Pte Ltd, and VSTECS Phils Inc. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In July 2024 - Endec Group and Narra Technology Park Development Inc announced their plans to set up a 300MW data center campus in the Philippines . The project, located on a 47-hectare site in New Clark City (NCC), will be constructed in three 100MW phases, with the first phase expected to commence in August and become operational by late 2025.

• In July 2024 - Equinix expanded into the Philippines with the acquisition of three data centers from Total Information Management.

Scope of the Report

By Service Model

• Co-location

• Managed Services

By Classification

• Tier 1

• Tier 2

• Tier 3

• Tier 4

1. Research Framework
   1. Research Objective
   2. Product Overview
   3. Market Segmentation
2. Executive Summary
3. Philippines Data Center Market Insights
   1. Industry Value Chain Analysis
   2. DROC Analysis
      1. Growth Drivers
         1. Growing Government Initiatives
         2. Increasing Internet of Things (IoT)
         3. Increasing Importance of Big Data and Analytics
      2. Restraints
         1. Land Availability
         2. Power Issues
      3. Opportunities
         1. Development in Artificial Intelligence (AI)
         2. Data Localization Regulations
      4. Challenges
         1. Skilled Workforce
         2. Data Security Concerns
   3. Technological Advancements/Recent Developments
   4. Regulatory Framework
   5. Porter’s Five Forces Analysis
      1. Bargaining Power of Suppliers
      2. Bargaining Power of Buyers
      3. Threat of New Entrants
      4. Threat of Substitutes
      5. Intensity of Rivalry
4. Philippines Data Center Market: Marketing Strategies
5. Philippines Data Center Market Overview
   1. Market Size & Forecast, 2019–2030
      1. By Value (USD Million)
   2. Market Share & Forecast
      1. By Service Model
         1. Co-location
         2. Managed Services
      2. By Classification
         1. Tier 1
         2. Tier 2
         3. Tier 3
         4. Tier 4
6. Competitive Landscape
   1. List of Key Players and Their Offerings
   2. Philippines Data Center Company Market Share Analysis, 2023
   3. Competitive Benchmarking, By Operating Parameters
   4. Key Strategic Developments (Mergers, Acquisitions, Partnerships, etc.)
7. Impact of Escalating Geopolitical Tensions on Philippines Data Center Market
8. Company Profiles (Company Overview, Financial Matrix, Competitive Landscape, Key Personnel, Key Competitors, Contact Address, Strategic Outlook, and SWOT Analysis)
   1. Epldt Inc.
   2. GTI Corporation
   3. NTT Ltd
   4. STT GDC Pte Ltd
   5. Zenlayer Inc.
   6. Bitstop
   7. Dataone
   8. Space DC Pte Ltd
   9. VSTECS Phils Inc.
   10. Other Prominent Players
9. Key Strategic Recommendations
10. Research Methodology
    1. Qualitative Research
       1.  Primary & Secondary Research
    2.  Quantitative Research
    3.  Market Breakdown & Data Triangulation
       1.  Secondary Research
       2.  Primary Research
    4. Breakdown of Primary Research Respondents, By Country
    5.  Assumptions & Limitations

*Financial information of non-listed companies can be provided as per availability.

**The segmentation and the companies are subject to modifications based on in-depth secondary research for the final deliverable.

List of Figures

Figure 1       Philippines Data Center Segmentation

Figure 2       Philippines Data Center Market Value Chain Analysis

Figure 3       Company Market Share Analysis, 2023

Figure 4       Philippines Data Center Market Size, By Value (USD Million), 2019–2030

Figure 5       Philippines Data Center Market Share, By Service Model, By Value, 2019–2030

Figure 6       Philippines Data Center Market Share, By Classification, By Value, 2019–2030

List of Tables

Table 1        Philippines Data Center Market Size, By Value (USD Million), 2019–2030

Table 2        Philippines Data Center Market Size, By Service Model, By Value, 2019–2030

Table 3        Philippines Data Center Market Size, By Classification, By Value, 2019–2030

Table 4        Epldt Inc. Company Overview

Table 5        Epldt Inc. Financial Overview

Table 6        GTI Corporation Company Overview

Table 7        GTI Corporation Financial Overview

Table 8        NTT Ltd Company Overview

Table 9        NTT Ltd Financial Overview

Table 10      STT GDC Pte Ltd Company Overview

Table 11      STT GDC Pte Ltd Financial Overview

Table 12      Zenlayer Inc. Company Overview

Table 13      Zenlayer Inc. Financial Overview

Table 14      Bitstop Company Overview

Table 15      Bitstop Financial Overview

Table 16      Dataone Company Overview

Table 17      Dataone Financial Overview

Table 18      Space DC Pte Ltd Company Overview

Table 19      Space DC Pte Ltd Financial Overview

Table 20      VSTECS Phils Inc. Company Overview

Table 21      VSTECS Phils Inc. Financial Overview