Over the last five years, data center supply in emerging markets in Asia Pacific has grown by over 300%, according to the Q3 2022 Data Center Report by Knight Frank in partnership with DC Byte, the leading data center research and analytics platform. The report, which tracks nine rapidly emerging markets, namely Osaka, Melbourne, Jakarta, Manila, Hanoi, Taipei, Hyderabad, New Delhi, and Chennai, revealed that total supply in these locations grew from just under 700 MW five years ago to over 3,000 MW today. In the first three quarters of 2022 alone, over 600 MW of new IT capacity has been added.
The Asia Pacific region was previously dominated by “Tier 1” markets, but decentralization is feeding the growth of secondary cities as new data center locations. More businesses are speeding up their digital transformations, and the demand for cloud services and lower latency has proliferated, resulting in cloud providers sourcing colocation and self-build facilities in previously overlooked cities. As hyperscalers and data center operators move to these new markets, the trend is likely to continue.
In the Philippines, there has been a significant amount of activity in the data center space over the last two years. Recently, AWS announced local zones in Manila and Hanoi this year and is in the process of rolling them out. Digital Edge has also launched its first DC in the Philippines, the Narra 1, which is now ready for service.
The report puts Manila’s IT capacity at approximately 163.81 MW, including live, early stage, committed, and under construction. Yet there is a substantial level of inquiries from data center investors and operators in the Philippines, too. Players are looking for the next area of growth in emerging markets in Southeast Asia, and the Philippines is among the preferred locations.
In general, the Philippines is likely going to see more local companies entering the data center industry through joint ventures with international operators and more expansion in and around the Greater Metro Manila area. Primarily, the large local demand in an underserved market has been a draw for cloud service providers, data center operators, and hyperscalers. Business-friendly legislation, such as the passage of the Foreign Investment Act and the Public Service Act, and incentives provided by the CREATE Act also helps make the country more attractive. #