Budget constraints may limit gov’t data center investments this year

THE DEPARTMENT of Information and Communications Technology (DICT) will use its 2025 budget for data centers for Subic Data Center (SDC) instead of investing in new facilities due to limited funding.

“One of our challenges is budgetary constraints when it comes to investing in data centers,” DICT Assistant Secretary for Legal Affairs Renato A. Paraiso told ����ý in an interview.

“As far as 2025 goes, our budget for data centers will go to the SBMA (Subic Bay Metropolitan Authority) data center that we have already constructed and to make it up to specs for it to be usable,” he added.

He said the DICT is in talks with other private companies for public-private partnerships for data centers to help bridge the funding gap.

“It’s not because of lack of drive, lack of initiative. It’s just plain old budgetary constraints,” Mr. Paraiso said.

In April 2024, the DICT signed a memorandum of agreement with Development Bank of the Philippines Data Center, Inc. to construct the Subic Data Center.

The DICT said the SDC is a vital component of its National Government Data Center Project and “will drive digital transformation in Central Luzon by extending reliable ICT services to client agencies.”

“The SDC will also power the deployment of IT-enabled banking products such as e-wallet, payment and financial services platforms, and internet banking, tapping into the decades of experience of the country’s pre-eminent development bank,” it earlier said.

GROWING DEMAND
Dominic Vincent D. Ligot, founder of Cirrolytix, a social impact technology company, said predicted investment trends for data centers this year involve “significant funding” from local and foreign investors seeking to establish or expand data center operations.

“The Philippines is positioning itself to meet growing demands for data centers through increased investments and government support,” he said in an e-mail.

Mr. Ligot added that the growing deployment of artificial intelligence (AI) across industries has spurred the growth of data centers in the Philippines.

“As organizations integrate AI technologies into their operations, they require robust data storage and processing capabilities provided by advanced data centers.”

Utilizing AI and data centers will enable businesses to adopt cloud-based solutions more effectively, he said.

Meanwhile, the total capacity of data centers in the country is expected to reach 300 megawatts (MW) this year from its current 96 MW, Mr. Ligot said.

The market’s size is projected to hit 954.22 MW by 2029, showing the “robust growth trajectory for the sector,” he added. — Almira Louise S. Martinez