AI data centers in Visayas worth considering, MGEN says

By Mariela Angella Oladive

ILOILO CITY — The growing data center industry is worth considering as an economic opportunity for the country, provided its benefits outweigh its costs, an executive of Meralco PowerGen Corp. (MGEN) said.

Arnel L. Santos, president and chief executive officer of MGEN Thermal Energy, said the industry’s potential gains should be assessed against its possible disadvantages, with weight given to both national and local community interests.

“Any opportunity will have its pluses and minuses. We just have to look at the balance vis-à-vis the national interest and the interests of the local community. If the balance is positive, then I think it’s worth considering,” Santos said during a media roundtable in Iloilo City on Friday.

Data centers are among the emerging industries expected to drive additional electricity demand because of their energy-intensive operations.

In Oton, Iloilo, a proposed 50-megawatt (MW) hyperscale artificial intelligence data center recently drew public attention over its projected electricity and water requirements.

The project, planned for a 10-hectare site in Barangay Abilay Sur, was withdrawn by its proponent on Aug. 16, two days after a public consultation where residents raised questions about its environmental and resource impacts.

Norwegian developer Daniel Stefan Robertsen, managing director of Norway Green Energy, had pitched the campus at about EUR 500 million, or roughly PHP 35.48 billion, starting at 10 MW and scaling to 50 MW, with a closed-loop cooling system circulating some 2,500 cubic meters of water daily at full capacity. He walked out of the Aug. 14 consultation during questioning on water use.

The discussion also comes amid broader national interest in AI and semiconductor investments through Pax Silica, a U.S.-led initiative aimed at strengthening supply chains for semiconductors, artificial intelligence, and critical minerals.

The Philippine component of that initiative is a 4,000-acre coordination office, or “Golden Node,” at New Clark City in Tarlac, envisioned by the Bases Conversion and Development Authority as an industrial, research, and advanced manufacturing hub rather than a hyperscale data center campus.

Santos said the potential entry of data centers should be viewed separately from the broader issue of grid tightness in the Visayas.

He said the region can no longer depend on surplus power from Mindanao, pointing to the need to address the fundamentals of energy expansion as electricity demand grows.

That tightness is well documented. The Visayas grid was placed under its 22nd red alert of the year on Aug. 26, when 32 plants were on forced outage and 938.9 MW was unavailable against a peak demand of 2,530 MW. The National Grid Corp. of the Philippines has also logged 87 yellow alerts in the region so far in 2026, with limited imports from Mindanao repeatedly cited as a factor.

Santos described data centers as one of the growth opportunities that could drive additional power demand in the region.

He said the decision on whether a data center builds its own or embedded generation should be left to the investor, based on the economics of the project.

“For the investor, who wishes to build the data center business here in Visayas, and they feel like an embedded setup will be economically profitable, they can make that decision,” he said.

Such a decision, Santos added, should not be read as settling the condition of the broader grid.

“The grid must be resolved by itself. We need to really look at the totality of the grid capability,” he said.

Antonio Cabalhug, first vice president for MGEN Thermal’s Panay site, agreed that businesses may opt to build their own generation facilities depending on their power requirements and business considerations.

He said such arrangements would not necessarily affect MGEN’s role as a regular power supplier.

Cabalhug said MGEN Thermal’s main concern is ensuring that its existing power supply remains reliable and available as electricity demand continues to increase.

MGEN Thermal operates the Panay Energy Development Corp. coal-fired plant in Barangay Ingore, La Paz, Iloilo City. Its 278.4-MW Unit 3 returned to service on July 3 after repairs to an equipment failure in May.