However, unless we do something about it today, we will also miss this train.
According to McKinsey & Co., the global data center market could grow to $1 trillion by 2027 and as much as $6.7 trillion by 2030. Demand from AI alone could account for $5.3 trillion by 2030.
But here lies the rub: power, or the lack of it
The prime inhibitor of this growth is power.
According to a recent report, power constraints are beginning to be felt as fundamental challenges to the expansion of AI Data centers all over the world.
In the past, data centers expected utilities to provide the grid connection to power their needs. Today, the model has shifted — data centers are now being built wherever reliable power is available.
Globally, the problem is not just generation. It is also transmission and distribution. The power industry is plagued by antiquated systems, infrastructure, and regulatory frameworks that are ill-suited to the needs of the AI data centers.
The current philosophy of the power sector is still stuck to the model established over 120 years ago in New York when that power plant on Pearl Street was constructed.
In this race, markets will reward those who can keep the lights on
So, where is the Philippines in all these opportunities?
Right now, there is a consensus that Malaysia has surged ahead as the preferred location for hyperscale deployments. It has, among others, the Johor-Singapore Special Economic Zone. Malaysia provides cheap land and power, and its proximity to Singapore enhances the appeal of AI Data Centers.
Not far behind is Vietnam. The country has allowed foreigners to acquire land and operate data centers without a local partner. Vietnam has declared data centers as “high-priority technology.” NVIDIA, Google, and Microsoft have recently started talks with the government for possible investments in the country.
Based on public reports, power costs for data centers in Viet Nam and Malaysia range from $0.07 to $0.10 per kilowatt-hour, equivalent to ₱3.98 to ₱5.90 per kWh.
In comparison, Philippine rates of ₱10 to ₱12 per kWh make the country far less competitive. While this gap remains a major hurdle, one bright spot is MNL1, a 75-MW green campus data center in Cainta.
Solutions exist. The question is: do we have the will?”
The broader challenge lies in attracting large-scale investments in AI data centers.
Experts say government intervention will be necessary if the Philippines is to compete effectively with its neighbors.
Beyond jobs and logistics infrastructure, expanding the country’s data center industry could also elevate STEM education and guide young Filipinos toward careers in artificial intelligence.
There are solutions. But the government must address the issues I have raised in previous columns: NGCP transmission projects, power rate regulation by the ERC, and inadequate distribution networks, among others.
And just like Viet Nam and Malaysia, the government itself must take a more active role. Let’s put our money where our mouths are.
A power industry expert with over 40 years in experience as chief executive officer in firms ranging from banking, power, and advisory services.
