PHL on track to be the next hyperscaler hub in the Asia Pacific

As the Philippines is gearing to be the next hyperscaler hub in the Asia-Pacific region, many opportunities for investments and partnerships await the hyperscaler and data center firms who want to invest in the country, especially from the companies in Hong Kong and China.

The promising prospect and competitive advantage of the Philippines as the next investment destination for the hyperscaler and data center industry were highlighted during a webinar held by the Board of Investments (BOI), through its International Investments Promotions Service (IIPS), and the Philippine Trade and Investment Center in Hong Kong on August 24, 2022.

In the event, Trade Secretary Alfredo E. Pascual underscored that the Philippines is ready to be the next hyperscaler hub in the Asia Pacific. “We believe that the hyperscalers industry will be the next growth engine of the Philippines. We are keen on helping hyperscalers cloud services and start-up ecosystem in the Philippines,” he said.

“We hope that you find these opportunities as promising as we do with your trust and passion. Let us make hyperscaler investments and partnerships happen in the Philippines,” Secretary Pascual emphasized.

Also, Mr. Victor Aliwalas, VP and Technology Management Advisor of the PLDT Enterprise, shared his thoughts about the Philippine data center market. According to him, the country is ripe for digital and bullish growth prospects. In 2022, the Philippines is expected to lead the technology spending growth in Asia, ahead of Vietnam and Malaysia. Mr. Aliwalas also highlighted the Jupiter Cable System, the newest trans-Pacific cable facility connecting the Philippines to the USA and Japan. With a network distance of 14,866 kilometers, it is the fastest cable system between the Philippines and the US with 126ms latency between Daet, Camarines Norte, and Los Angeles, California.

Other officials who pitched for the country’s standing as the next hyperscaler hub was Consul General in Hong Kong Raly L. Tejada, who highlighted the growing data center capability of the Philippines. While Undersecretary Rafaelita M. Aldaba of the DTI – Competitiveness and Innovation Group presented the value proposition of the Philippines for the hyperscalers as well as the numerous government initiatives for the firms.

According to Undersecretary Aldaba, the Philippines has a thriving digital economy landscape with strong macroeconomic fundamentals that will continue to attract positive investment prospects.  Also, she mentioned that the Philippines is an early adapter of 5G technology in the Asia Pacific, according to Moody’s, along with Hong Kong, Singapore, and Malaysia.

Undersecretary Aldaba also pointed out that the Philippines has a “demographic sweet spot” because of its rich talent pool of 46.5 million workforces, and the country is producing an average of 750,000 graduates annually. With the amended PSA, the official said, the government is allowing 100 percent foreign ownership in the country’s telecommunications industry.

The event was supported by Department of Information and Communications Technology (DICT) Secretary Ivan John E. Uy, who delivered a presentation on the state and direction of the Information and Communications Technology (ICT) infrastructure in the Philippines, and by the Department of Energy (DOE) –  Renewable Energy Management Bureau Director Mylene Capongcol who presented the government’s plans and commitment to developing the renewable energy sector, which would also support the growing data center industry in the country.

Meanwhile, the Philippines as a high potential market was attested by two of the leading hyperscaler companies in Hong Kong and China.

Mr. Paul Lai, Senior Vice President, In-Country Project Investment of HGC Global Communications, Ltd., and Mr. Allen Guo, Country Manager of the Alibaba Cloud Intelligence – Philippines, both affirmed the country’s readiness as an ideal investment location, citing its resilient economy amid the pandemic, its “welcoming regulatory environment”, particularly with the passage of the amended Public Service Act (PSA) and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, coupled with the Philippine businesses increasingly relying on cloud-based IT solutions for growth.

Executive Director Evariste M. Cagatan of the BOI’s Investments Promotion Services (IPS) delivered the closing message at the end of the webinar and emphasized that the country  “has a bullish economic growth trajectory” to host hyperscaler and data center operations, as the government has been aggressively promoting the Philippines with its competitive advantage.

“We acknowledge the support of Alibaba Cloud Intelligence and HGC Global Communications Limited, both of whom already made it happen in the Philippines. They have generously shared their positive experience. With the likes of Alibaba and HGC Global that invested in the country and many others that have signified their interest in the field and further expand their footprint, the Philippines is now positioned to be the next hyperscaler hub in the Asia Pacific,” the BOI official concluded.