BUSINESS | PH emerges as cost-competitive data center hub
Industry players see the Philippines benefiting from rising demand for digital services, enterprise cloud adoption and government-led digitalization initiatives.
Source: iStock photo
The Philippines is positioning itself as a cost-competitive destination for data center development, with construction costs estimated at $6 million to $8 million per megawatt, roughly half the level in mature regional markets such as Japan, Singapore and South Korea.
An industry executive said the pricing advantage is driven by structural factors that favor new infrastructure investments, even as long-term growth will depend on clearer policies and a reliable power supply.
Cyrus Adaggra, president for Asia-Pacific at Equinix, said lower land, site development, construction and labor costs contribute to the country’s competitiveness.
“The Philippines’ lower data center build costs are driven by a combination of structural advantages. Land and site development costs remain materially lower, construction and labor economics also play a meaningful role,” Adaggra said.
He added that cost is only one consideration in market expansion decisions.
“For Equinix, cost is only one part of the equation. Our focus is on long-term value, resilience and sustainability. Equinix views the Philippines as a strategic growth market and is actively expanding its presence,” he said.
Industry players see the Philippines benefiting from rising demand for digital services, enterprise cloud adoption and government-led digitalization initiatives.
Interconnection push
Enterprises in Asia-Pacific are shifting from standalone IT systems to interconnected infrastructure that enables direct access to cloud, network and digital ecosystems.
Adaggra said facilities in the Philippines are designed to allow local companies to link to global networks without deploying infrastructure overseas.
“Equinix’s Philippine facilities are designed to help local companies move beyond domestic scale by plugging directly into global digital ecosystems through secure, high-performance interconnection,” he said.
Through private connections to major cloud regions in Singapore, Hong Kong and Tokyo, local enterprises can adopt hybrid and multi-cloud strategies while managing latency and regulatory requirements.
“Local companies can keep latency-sensitive workloads private while seamlessly connecting to regional or global clouds for scale, analytics and AI,” Adaggra said.
Demand signals
Investor yields in some Philippine data center projects have exceeded 12%, reflecting strong demand and the sector’s growth trajectory.
Adaggra cited projections that the country’s digital economy could reach $36 billion in gross merchandise value in 2025, supported by infrastructure expansion, subsea connectivity, 5G rollout and regulatory reforms.
“The Philippines’ data center market has been expanding rapidly, with capacity and colocation demand rising alongside broader digital transformation trends, making it an appealing destination for regional investments,” he said.
Sectors such as fintech, business process outsourcing and e-commerce — which rely on low-latency connectivity — are expected to benefit from improved interconnection.
Policy and power gaps
Despite momentum, industry participants flagged policy clarity, energy availability and deeper connectivity infrastructure as key challenges.
“While the industry continues to navigate challenges around policy clarity, energy availability and expanded connectivity infrastructure, what ultimately drives our decisions is the strong and growing need from local and global customers,” Adaggra said.
He added that demand for AI-ready infrastructure and hybrid multi-cloud environments is shaping continued investments in Manila.
“We see enterprises accelerating hybrid multi-cloud adoption, global platforms needing lower-latency regional access and AI-driven workloads demanding far greater power density and interconnection,” he said.
Adaggra said sustainability is becoming central to infrastructure planning.
“Digital infrastructure that is efficient, resilient and responsibly powered is what allows fast-growing economies like the Philippines to scale confidently in the digital era,” he said.
————————————————————————-
WE ARE 10 YEARS OLD! TEN YEARS OF TECHSABADO, IMAGINE THAT.
WATCH TECHSABADO ON OUR YOUTUBE CHANNEL:
WATCH OUR OTHER YOUTUBE CHANNELS:
PLEASE LIKE our FACEBOOK PAGE and SUBSCRIBE to OUR YOUTUBE CHANNEL.
PLEASE LIKE our FACEBOOK PAGE and SUBSCRIBE to OUR YOUTUBE CHANNEL.
