Insider Spotlight
President Ferdinand Marcos Jr.’s Executive Order No. 119 introduces updated government data classifications and requires highly sensitive government information to remain within Philippine jurisdiction.
Big picture
Until now, the Philippines had no enacted data sovereignty law, with policymakers relying on draft guidelines as concerns grew over where sensitive government data was stored.
Executive Order No. 119 pushes more sensitive government data to be kept within the country, potentially driving greater use of Philippine-based data centers.
The issue gained urgency last year after congressional budget hearings revealed that about 90 percent of government data was hosted overseas, mostly in Singapore, at an estimated annual cost of P12 billion.
Analyst’s view
Ron Acoba, chief investment strategist at Trading Edge Consultancy, said EO 119 should support long-term demand for local data centers.
“It is just natural for the government to require all its data and more importantly sensitive information to be kept onshore,” he told InsiderPH.
This could add demand for data centers operated by PLDT, Globe Telecom (STT GDC Philippines) and Converge ICT Solutions.
“We can’t quantify yet how much this segment will contribute since most if not all cloud services clients are from enterprises for the current centers initially included in VITO REIT,” he said.
Investment case
VITRO REIT filed to become the country’s first data center initial public offering when it lists in October.
In its IPO prospectus , the company said data sovereignty policies could create incremental, long-term demand for domestic data centers.
VITRO’s planned REIT portfolio includes eight data centers with nearly 24 megawatts of IT-ready capacity, about 30 percent of which remains available.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
