DTI: 3 big ‘hyperscalers’ ready investments in PH

Three major technology companies from the United States and China are expected to invest in the Philippines this year, with one of them committing to put in at least $800 million to upscale Philippine companies and turn them into world-class enterprises, the Department of Trade and Industry said Wednesday.

DTI Undersecretary Ceferino Rodolfo said two US firms and a Chinese company are to invest in the Philippines following the launch of the “hyperscaler” industry.

Hyperscalers are major technology companies that provide cloud, networking and internet services to help organizations grow and take advantage of the digital technologies.

“I’m pretty sure that within this year, at least one Chinese hyperscaler and at least one US hyperscaler will invest. Both are looking at green energy market here, and also looking at data privacy and integrated regulatory framework for the Philippines,” Rodolfo said during the ‘hyperscaler’ launch.

Trade Secretary Ramon Lopez said the investments of hyperscalers on tools and intellectual property would result in cheaper access to cloud technology and extend and enhance the customer’s capabilities.

“We are promoting hyperscalers as the country’s next growth engine in our ‘Make It Happen in the Philippines’ campaign, for a lot of reasons. Hyperscalers act as enabler of various industries and the backbone of digital-native industries such as financial technology and digital banking. Their increased presence will create a multiplier effect, especially with the potential increase in demand for renewable energy and data center developers,” Lopez said.

Hyperscale platforms provide the ability to quickly and seamlessly handle immense volumes of activity and data. Their capability for integration with other systems makes it cheaper for the customer to implement and integrate the platform.

They also create potential value in terms of generating foreign direct investments, improving internet connectivity, capital in IT infrastructure, manpower upskilling and renewable energy. Indirectly, their investments result in lower data cost for the country, cheaper cloud services and improved customer experience for the e-commerce industry.

Lopez said the Philippines’ digital landscape makes it an ideal setting for hyperscalers. According to the 2021 Digital Report, the Philippines remained the top country in social media and internet usage worldwide.

“E-commerce adoption in the Philippines grew from 70 percent in 2019 to 76 percent in 2020 and 80.2 percent in 2021. Our digital enterprises filled the void left by brick-and-mortar businesses affected by the community lockdowns. Online retail, delivery services, online entertainment, digital services, telehealth, work from home arrangements, digital payments—all of these helped us in the past year and continue to do so until now,” Lopez said.

He said the Philippines quickly evolved as the social media capital of the world with 89 million active social media users. As of January this year, the Philippines ranked 6th on Facebook, 10th on Youtube, 11th on Twitter and 18th on Instagram usage, according to the Global Social Media Use Ranking.

Data from the DTI’s Business Name Registration Next Generation System showed the number of online businesses involved in retail trade jumped from 1,848 in the first quarter of 2020 to 88,575 by the end of 2020. The total number of online business names registered for retail trade is around 109,648.

Hyperscalers can provide these businesses with scalable applications and storage portfolio of services to meet the growing demand of transactions.

“The pandemic has forced us to maximize the use of the digital platform which accelerated the growth of the data center market. The Philippines now ranks second overall among the Southeast Asian countries, with Manila having a compound annual growth rate of 14.2 percent, next to Hanoi Vietnam’s 14.5 percent. This poses a huge potential for the country and, according to the Frost and Sullivan research firm, the projected supply growth of data centers in 3 to 5 years for the Philippines is at 24 percent,” Lopez said.

Another area supported by hyperscaler’ platform is the artificial intelligence which is part of the growth drivers of the Philippines as a digital market.