Philippines Next Hyperscalers Hub in APAC?

The Philippines is poised to be the next hyperscalers hub in the Asia Pacific (APAC) region as the country’s digital and economic profile continues to gain ground amid the coronavirus pandemic, ac-cording to government executives.

Hyperscalers are global technology companies providing cloud and internet-based services, which require huge amounts of space, power, and connectivity because of their massive customer base and user demand surges. Alibaba, Google, Microsoft, Amazon, and Facebook are just some of the major and more prominent industry players.

“After being widely-recognized as the outsourcing capital of the world, this is the natural next step for the Philippines as our country now has all the necessary elements in place to make it happen and be the next hyperscalers hub in the region”, Department of Trade and Industry (DTI) Secretary and Board of Investments (BOI) Chairman Ramon Lopez said during the media launch event held September 1, 2021 “Philippines: The Next Strategic Hyperscalers Hub in APAC”.

“With our thriving digital and economic profiles, robust and sustainable infrastructure and rich talent pool, combined with strong government support and favorable regularly environment, global tech-nology giants can definitely ‘Make It Happen’ in the Philippines,” Secretary Lopez added.

Hyperscalers was identified by the Philippine government, through the BOI, as a new addition to the key priority sectors for intensive promotion under the “Make It Happen in the Philippines” campaign, the new international investments promotion campaign of the Philippines. The goal is to invite hyperscalers to expand their businesses in the country by setting up their cloud and network infra-structure in the Philippines.

The Philippines’ enterprise spending on cloud services is also expected to grow from $1.8 billion to $2.6 billion in 2024, according to Global Data, a data analytics and consulting company.
According to the 2021 Digital Report, the Philippines is among the top users in e-commerce adop-tion as penetration grows consistently from 70 percent in 2019, 76 percent in 2020 and is on track to hit over 80 percent this year.

The number of businesses in the Philippines also continues to grow. Based on DTI’s Business Name Registration System, the number of online businesses involved in retail trade jumped from 1,848 in January to March 2020 to 88,575 by the end of 2020. Presently, the total number of online business names registered for retail trade is around 109,648.

“This is where the hub of hyperscalers will address the growth as they will provide scalable applica-tions and storage portfolio of services to these businesses to meet the robust demand of transac-tions,” Secretary Lopez added, noting that hyperscalers as the enabler of said key industries and the backbone of digital-native industries such as fintech, digital banking and the like will make the Philippines an attractive market to hyperscalers.

Secretary Lopez also said that the government has accelerated the use of digital technology for government services to improve transactions in public offices with the implementation of the Cen-tral Business Portal (CBP), a single site for all business-related information and transactions such as securing business permits, licenses, and clearances.

Hyperscalers investors can likewise take advantage of the Philippines’ ready infrastructure support such telecommunications, connectivity, and presence of data centers for co-location, and the coun-try’s renewable energy readiness. Currently, there are nine key major commercial data center pro-viders within 10 cities across the country. These data centers possess an estimated 19,000 total rack capacity. The government is mainly targeting the Tier 1 and 2 players or key industry players who have made carbon-neutral commitments and have made significant investments in sourcing renewable energy for their facilities.

September 2, 2021 (Extracts)
Philippine Board of Investments

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