The Philippines is under pressure to strengthen its appeal for data center investments, especially focused on artificial intelligence, as highlighted in a recent World Bank report.
The World Bank's October East Asia and Pacific Economic Update revealed that countries like Malaysia and Thailand are emerging as leaders in attracting data centers, while the Philippines risks falling behind.
Key Factors for Data Center Success
Data center operators prefer markets with abundant energy and water, reliable power, and high internet speeds, less red tape, better institutional quality, and a skilled workforce.
World Bank
The report indicates that the number of data centers in East Asia has surged over the last decade, with China leading this growth. Malaysia, Indonesia, Thailand, and Vietnam are also making significant strides.
Despite facing higher electricity costs than its regional peers, the Philippines can still attract investments by enhancing its infrastructure and governance.
The World Bank noted that simply reducing energy costs does not guarantee data center growth. Instead, factors like grid reliability and institutional quality play a much larger role.
A notable finding from the report showed that improvements in governance could potentially double the number of data centers in a given area, while better grid reliability could lead to a 20% increase.
The organization suggests that focusing on fixing foundational issues could yield better results than offering tax incentives or subsidies for energy.
Overall, the World Bank emphasizes the importance of strategic investments in infrastructure to secure a competitive edge in the growing data center market.