ROADSHOW. The Department of Information and Communications Technology (DICT) holds a roadshow and seminar at the Provincial Training Center in Lingayen town, Pangasinan on June 3,2024. It aims to raise awareness on the projects and services of DICT including the National Fiber Backbone Project that will provide connectivity to villages in the Ilocos Region. (Screenshot from DICT’s live stream)
MANILA – The data center industry in the Philippines is booming, and the country is on track to become a major hub for digital infrastructure in Southeast Asia. This growth is driven by several factors highlighting the country’s strategic position and its commitment to technological advancement.
Analysts at Mordor Intelligence say that the data center market in the Philippines will grow by 14% yearly to hit 954.22 MW by 2029.
So, what’s behind this impressive rise?
The administration of President Ferdinand R. Marcos Jr. is making a big impact. The government has been offering tax breaks and making it easier for data-center companies to start up and prosper. And the Philippines has a young, tech-savvy population quickly picking up new digital tools in every field.
Addressing the World Consumer Electronics Expo and the World of Safety and Security Expo on Aug. 7, 2024, the President said around 170,000 Filipino students in engineering, IT, and sciences graduate annually.
“[This] will ensure a steady supply of professionals who will be working and innovating in these industries while a supportive government will create a favorable working environment,” the Chief Executive added.
Looking ahead, the Department of Information and Communications Technology (DICT) is projecting a five-fold increase in last year’s data center capacity to 300 megawatts (MW) by 2025.
Building the National Fiber backbone
On many occasions, President Marcos expressed his strong support for expanding the country’s data center industry, stressing that projects in this field will allow the Philippines to catch up with other nations in the digital world.
“We’re left behind when it comes to digitalization. That’s why the push for data centers, fiber optics and satellite is one of our priorities,” he said during a meeting with the Managing Director of ENDEC Development Corp in Malacanang in March 2023.
The expansion and acceleration of the National Broadband Program is bolstering the country’s connectivity and digital capabilities, especially with the milestone launch of phase 1 of the National Fiber Backbone (NFB). President Marcos said the NFB will give nano enterprises and micro, small, and medium-sized businesses big boost, helping them tap into the digital world to grow and promote their businesses.
“That is such an important part of the economic transformation that we are hoping to achieve,” he said.
President Marcos is confident the five remaining phases of the NFB will be completed in 2026 to allow more Filipinos, especially those in remote areas, to enjoy the benefits of fast and reliable Internet connection.
NFB Phase 1 covers 1,245 kilometers, connecting 28 locations from Laoag in Ilocos Norte to Roces Street in Quezon City. This phase offers an amazing 600 Gbps of Internet speed, bringing fast Internet to at least 14 provinces in Northern and Central Luzon. It also plans to reach two National Government Data Centers and four Bases Conversion and Development Authority (BCDA) ecozones.
President Marcos said that finishing the first part of the NFB Project will make things run better for 346 government offices linked to GovNet. This could save over PHP145 million every year.
The project will provide Internet access to more than 3,000 Filipinos through Free Wi-Fi sites, directly benefiting around 750,000 people across Regions 1, 2, 3, and the National Capital Region (NCR).
The NFB Program covers 28,000 kilometers of fiber-optic cables connecting Luzon, Visayas, and Mindanao. Phases 2 and 3 will extend the network further, bringing broadband internet to more government offices and public spaces.
Selling to the world
In October 2024, President Marcos invited Southeast Asian investors to explore the wide range of business opportunities in the Philippines. Speaking at the ASEAN Business and Investment Summit in Laos, he emphasized the country’s potential as a hub for smart and sustainable manufacturing. The President cited key policy changes and pointed cited areas open for investment.
“So, let me put on my salesman’s hat and invite you to explore the investment opportunities we offer. We are targeting industries like green metals, battery manufacturing, energy equipment, data centers, and agribusiness,” he said.
Key policy reforms include the Public-Private Partnership (PPP) Code, Internet Transactions Act, and the establishment of Green Lanes for Strategic Investments.
In September last year, Congress passed the PPP Code to streamline the rules for PPP projects and encourage greater private-sector involvement in infrastructure development. Republic Act No. 11967 or the Internet Transactions Act of 2023 aims to build trust in e-commerce by creating a regulatory framework that protects both consumers and merchants.
The Green Lanes for Strategic Investments, created through EO 18 issued in February 2023, will speed up and simplify processes for important investments.
On November 11, 2024, President Marcos signed the CREATE MORE Act, which makes the country’s tax-incentives system more investment-friendly, predictable, and globally competitive attracting high-quality investments that will fuel long-term economic growth.
“We cannot emphasize enough the important role of the business sector in shaping this law. Your feedback has been essential in our efforts to craft policies that make our country truly competitive on the global stage,” President Marcos said.
“As we open new doors of opportunity, we drive businesses to reinvest their capital, build upon the workforce, and initiate a ripple effect that will be felt across generations,” he added.
The law extends tax incentives for up to 27 years, lowers corporate income tax to 20% for certain businesses, and offers a 100% deduction on power costs for manufacturers. It also simplifies the VAT refund process and replaces multiple local taxes with a single tax for registered businesses. These reforms aim to create a more welcoming environment for investment and help drive economic growth.
As the country continues to modernize and simplify its business policies, it’s creating a more competitive and inclusive economy, offering greater opportunities for both local and international investors. (PNA)
