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FINANCIAL SECTOR LEADING PHL DATA CENTER DEMAND
STT Fairview data center campus STT GDC
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By John Eiron R. Francisco
HE financial services sector remains the biggest user of data centers in the Philippines, driven by rising digital activity, a growing population, and more businesses adopting cloud-first strategies, according to the local chief executive of a data center firm. “The data center customers are still predominantly in the financial services sector—banks and other types of financial institutions. Then you have the telcos and other telecommunications companies, which run very information systems-intensive applications,” ST Telemedia Global Data Centres (STT GDC) Philippines Chief Executive Officer Carlo Malana said in a media interview during its exclusive event series on Thursday at the Grand Hyatt Manila in Taguig City. Expert insights and industry studies consistently point to the financial services sector as the biggest user of data center capacity in the Philippines—likely making up around 40 percent or more of total demand, based on earlier analyses. This strong demand is largely fueled by regulatory mandates from the Bangko Sentral ng Pilipinas (BSP), which require banks to upgrade their digital infrastructure to ensure operational resilience, cybersecurity, and improved service delivery. Data from the Philippine Statistics Authority (PSA) shows that the digital economy grew to P2.25 trillion in 2024, contributing 8.5 percent to GDP—a 7.6-percent rise from the previous year. The Asian Development Bank forecasts even faster growth ahead, with the digital economy expected to expand at a compound annual growth rate of 12 percent to 15 percent through 2027, driven largely by e-commerce, digital payments, and cloud adoption. Beyond financial institutions, Malana noted the growing presence of hyperscale providers— global tech firms operating content delivery networks and edge applications—aimed at bringing digital services closer to Filipino users.
“Why would you generate data in the Philippines, send it to Singapore, then access it again from the Philippines?”—Carlo Malana, CEO of STT GDC Philippines, on inefficiencies in cross-border data hosting. STT GDC
FROM SERVERS TO THE CLOUD: KEY MILESTONES
2017: DICT Cloud-First Policy n 2020: GCash, remote work boom n 2024: Over 70% of gov’t agencies migrated n 2025+: Push for AI/Data Sovereignty n
These trends reflect the Philippines’s broader digital acceleration, Malana noted. With over 115 million people, the country is the second most populous in Southeast Asia and is seeing rapid smartphone adoption. The continued expansion of 5G and LTE networks is also fueling sharp increases in data generation and usage.
Top internet users
ACCORDING to the Digital 2025 study by Meltwater and We Are Social, Filipinos continue to lead globally in internet usage, spending an average of 8 hours and 52 minutes online daily—well above the global average of 6 hours and 38 minutes. The study also found that 98.9 percent of Filipino internet users use chat or messaging apps monthly, 94.2 percent use email, and nearly half (49.5 percent) make mobile video calls—figures all higher than global averages. In digital finance, Filipinos also ranked high, with 91.3 percent accessing banking, investment, or insurance platforms each month. Malana emphasized that the Covid-19 pandemic was a key turning point, accelerating the country’s digital shift. Mobile wallets
like GCash became mainstream tools for everyday transactions, while more businesses and government agencies adopted cloud solutions to improve efficiency. “Even after—especially after—the pandemic, we’ve gotten much more digital. That’s what’s sustaining the industry [data center] today,” Malana said. Many organizations, he said, have since embraced a cloud-first approach, viewing cloud computing as the most practical and scalable way to manage data and computing workloads. This aligns with the Department of Information and Communications Technology’s (DICT) cloud-first policy, introduced in 2017, which has already prompted over 70 percent of government agencies to migrate to cloud platforms. The policy aims to improve service delivery while strengthening data security and reducing IT infrastructure costs. “Before, you had to buy servers for every app. You can’t always utilize them efficiently. Cloud just makes more sense,” he explained. In the Philippines, cloud services are predominantly hosted outside the country, said Malana. “When you go cloud, chances are you’re not local,” he noted, explaining that data such as emails, Zoom calls, and archives—unless temporarily cached—are typically stored abroad, most often in Singapore. Singapore currently serves as the main hub for cloud service pro-
viders catering to the Philippines. However, capacity constraints are becoming a growing issue. “There’s a moratorium. They do not have capacity,” Malana said, referring to Singapore’s tightened restrictions on new data center developments. In 2019, Singapore imposed a moratorium on data center construction due to land limitations, high power usage—which accounted for 7 percent of its total electricity consumption—and sustainability concerns tied to its dependence on natural gas. Although the ban was lifted in 2022, new projects are now subject to strict environmental and efficiency standards, with individual capacities capped at 5 to 30 megawatts. Under its 2024 Green Data Centre Roadmap, Singapore plans to add only 300 MW in total by promoting renewable energy and improving energy use. These constraints are driving hyperscale providers to look toward neighboring markets, including the Philippines, for expansion opportunities. Malana emphasized the need for infrastructure rationalization: “Why would you generate data in the Philippines, send it to Singapore, then access it again from the Philippines?” This inefficient data loop results in higher costs and slower performance, he said. “Sometimes the app feels slow because it’s bouncing back and forth between the Philippines and Singapore 20 times just to load the
first page,” he explained. With demand rising and Singapore’s capacity tightening, Malana said it makes sense to build data infrastructure closer to where data is generated and consumed. “If you’re generating data here and consuming it here, it will make sense to keep it here,” he said, noting that some hyperscalers have already begun augmenting their presence in the Philippines. He added that some international data professionals, including Filipino experts, are returning home to help build up the domestic data center industry. STT GDC Philippines currently operates seven data centers nationwide with a total IT load capacity exceeding 150 megawatts. Four of these facilities are strategically located in Metro Manila—specifically in Quezon City, Mandaluyong, Makati, and the newly launched Fairview site. The company also runs two data centers in Cavite and one in Davao. Its new flagship facility in Fairview, once fully built out, is designed to deliver 124 megawatts of IT load. This robust infrastructure is part of a joint venture with Globe Telecom and Ayala Corporation.
While Malana did not disclose the exact investment figures for the Cavite and Fairview sites, he said the industry benchmark typically ranges from $11 million to $12 million per megawatt, depending on project scale and design requirements.
‘Push for data sovereignty’
WITH digital transformation accelerating across sectors, the push for data localization is gaining urgency. While cloud adoption remains the most efficient route for modernization, STT GDC’s Malana underscored the need for clearer regulations governing data sovereignty. Previous proposals for data localization laws, he noted, were often too broad, leading to uncertainty across industries. But with more sensitive government and citizen data being stored offshore—primarily in Singapore— he argued that a more focused legal framework may soon be necessary. Singapore is currently the preferred hosting hub for Philippine data due to its strong regulatory environment. However, Malana cautioned that not all countries offer the same level of trust and Continued on A2
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PESO EXCHANGE RATES n US 55.5690 n JAPAN 0.3809 n UK 73.6456 n HK 7.1486 n CHINA 7.6700 n SINGAPORE 42.7618 n AUSTRALIA 35.5530 n EU 62.4040 n KOREA 0.0396 n SAUDI ARABIA 14.8156 Source: BSP (May 9, 2025)