The Philippines is set for a significant expansion of data center capacity, with 221MW of planned projects and 43MW under construction, as operators increasingly develop larger, higher-density facilities designed to support artificial intelligence (AI) workloads, BMI Country Risk and Industry Research said on last Friday.
The research firm said in a report that the country’s data center market currently has 44 facilities with about 140MW of live capacity, but the conversion of planned projects into operational capacity will depend heavily on operators securing renewable power, grid connections and regulatory approvals.
STT GDC’s planned 124MW Fairview campus and ePLDT’s prospective 100MW facility in Cavite are among the developments signaling a shift towards larger, phased campuses capable of serving hyperscale cloud and AI customers.
BMI said the Philippines could benefit from growing demand for data center capacity as more mature South East Asian markets face saturation and infrastructure constraints.
However, it cautioned that the country would need to compete actively with Malaysia, Indonesia and Thailand for hyperscale investment rather than rely on demand automatically spilling over from those markets.
“The Philippines must therefore compete for deployments rather than rely on automatic spillover,” BMI said in a report.
Its opportunity lies in offering hyperscalers portfolio diversification, domestic digital demand, secured power and land, while leveraging the country’s strategic position on subsea cable routes connecting developed Asian markets.
Manila remains center of market
The Philippine data center market remains concentrated in Greater Manila and the southern industrial corridor, although investment is gradually expanding into nearby areas such as Laguna, Santa Rosa and Cavite.
BMI estimates installed capacity at about 140MW, with PLDT’s 50MW VITRO Santa Rosa facility among the country’s largest operational sites.
The research firm estimates another 43MW is under construction, with a further 221MW in the planned pipeline.
STT GDC’s Fairview campus in Quezon City is expected to be one of the largest developments. The four-building campus is planned to provide 124MW of IT load at full build-out.
The operator has also announced NVIDIA DGX-ready certification and a liquid-cooling showroom, while targeting a transition towards renewable-energy operations. BMI said these features indicate how new Philippine capacity is increasingly being configured for high-density computing and AI workloads.
STT GDC is also developing its Cavite 2 expansion, with 6MW of capacity, while Digital Edge’s NARRA1 facility in Laguna has been operating since 2023.
Digital Halo has also opened a hyperscale campus in Cainta, Rizal, extending the Greater Manila data centre cluster eastward.
Meanwhile, A-FLOW, a joint venture between AyalaLand Logistics Holdings and FLOW Digital Infrastructure, opened the initial 6MW phase of its ML1 campus in Laguna in November 2025. The three-building development is designed to eventually reach 36MW.
ePLDT’s 50MW VITRO Santa Rosa facility is also capable of supporting high-density AI workloads, while the company is pursuing a potential Cavite facility with at least 100MW of capacity.
Together, these projects point to a market increasingly characterised by larger, phased developments rather than smaller standalone facilities.
AI broadens demand
Demand for data centers in the Philippines is being supported by enterprise digitalisation, cloud adoption and the emergence of AI applications.
BMI forecasts cloud spending in the country at US$2.5 billion in 2026.
AI applications are beginning to expand beyond the country’s large contact-centre industry, with companies using AI for areas such as fraud detection in financial services and predictive analytics and route optimisation in logistics.
AI adoption is particularly visible in contact centres because the Philippines has a large information technology and business process management (IT-BPM) industry. Automation of routine interactions and the use of AI to augment workers are therefore becoming increasingly relevant to the sector.
BMI said this emerging demand could make the Philippines a more important destination for cloud and hyperscale customers.
However, the country’s AI-related data centre pipeline remains relatively modest compared with Malaysia and Indonesia.
The research firm said announced capacity could take years to become operational compute capacity, making the conversion of projects into energised facilities a key factor determining the country’s ability to capture AI-related investment.
Connectivity offers competitive advantage
The Philippines has an advantage in its geographic position and subsea connectivity, particularly in serving markets such as Japan and South Korea.
BMI said the country’s median latency to digitally mature Asian markets provides an opportunity for cross-border capacity leasing as the cost of hyperscale data centre investment and operations rises in those markets.
The country could therefore serve as an alternative location for workloads that do not necessarily need to be hosted in Japan or South Korea.
Alibaba Cloud already operates a cloud region in Manila, with one availability zone launched in 2021. In July 2025, Alibaba Cloud announced plans to expand its presence in South East Asia, including data centres in the Philippines and Malaysia, alongside plans to increase investment in AI and cloud infrastructure.
BMI said operators are increasingly competing on the ability to deliver future-proof infrastructure rather than simply offering lower prices or available racks.
This is encouraging providers to combine high-capacity power supplies, renewable energy procurement, connectivity and infrastructure capable of supporting higher-density computing.
Power, grid constraints remain key risks
Power availability is emerging as one of the biggest constraints on data centre expansion in the Philippines, as developers seek reliable and competitively priced electricity for energy-intensive facilities.
BMI said renewable energy procurement is becoming increasingly important to data center operators, with power purchase agreements and renewable-energy matching commitments increasingly forming part of their operating models.
Digital Edge, for example, has signed a hydroelectric energy agreement with First Gen Corp to supply electricity for its NARRA1 data centre in Manila.
The agreement follows solar power projects announced in 2024 as operators seek alternative sources of electricity to meet growing data centre demand.
BMI expects data center development and power infrastructure investment to become increasingly interconnected, with future facilities potentially being planned alongside generation and grid projects.
However, the Philippines faces risks from grid constraints and permitting delays.
BMI’s project risk metric gives the Philippines a score of 2.57 out of 10, compared with a global average of just over 1.5, with higher values indicating greater project risk.
The research firm said the country’s power grid can face constraints during periods of peak demand, while permitting delays can also slow the delivery of new facilities.
These constraints could become more significant as developers seek to convert the country’s 221MW planned pipeline into operational capacity.
Competition intensifies
The Philippines is competing for hyperscale investment with other South East Asian markets, particularly Malaysia, Indonesia and Thailand.
BMI said it no longer expects the Philippines to benefit automatically as Malaysia and Indonesia approach infrastructure and capacity constraints.
Malaysia remains a major regional investment destination, while Indonesia and Thailand are also attracting growing interest from hyperscalers.
The Philippines will therefore need to demonstrate that it can deliver power, land and connectivity within commercially viable timeframes.
The government is attempting to reduce the time required for hyperscalers to assemble these requirements independently. BMI said the process had previously taken companies six to nine months.
Reducing time-to-market will be important because data centre projects require substantial upfront investment and depend on the timely availability of electricity, land, connectivity and permits.
The expansion of data centers is also generating wider social and environmental concerns.
BMI noted opposition to proposed infrastructure developments such as the Pax Silica AI and semiconductor hub in New Clark City, with critics raising concerns about potential effects on forests, watersheds, farmland and nearby communities.
The growth of AI-related infrastructure is also raising questions about employment in the Philippines’ large BPO industry. The International Labour Organization has identified the BPO sector as the country’s area most vulnerable to automation, although it expects AI’s broader impact to involve changes in tasks rather than widespread job losses.
Converting pipeline into capacity
BMI said the Philippines has the ingredients to become a more important data centre market, but its success will depend on execution rather than announcements alone.
The country has a growing pipeline, a large domestic digital economy and strategic subsea connectivity to major Asian markets. At the same time, competition for hyperscale investment is intensifying across South East Asia.
For the Philippines, securing renewable power and grid connections while reducing permitting bottlenecks will be critical to bringing its planned capacity online.
The combination of STT GDC’s 124MW Fairview development, ePLDT’s potential 100MW Cavite facility and other projects indicates that the market is moving towards larger campuses designed for cloud and AI workloads.
However, BMI said the ability to turn these projects into operational capacity at competitive power costs will ultimately determine how much of the regional data center growth opportunity the Philippines can capture.
Asian markets tighten scrutiny on AI demand as grid strain lifts thermal power’s upside – BMI