THE Philippines is poised to ride a wave of data center investments as global demand for digital services accelerates, but industry leaders warn that inadequate power supply could stall the country’s ambitions.
It is estimated that the local data center industry will require at least 1,400 megawatts (MW) of additional capacity over the next five years, a massive jump from the roughly 200 MW currently available.
“Data centers are coming, but we don’t yet have the power supply to match. The projected demand is seven times what we currently have,” said Marco Miguel Javier, BPI vice president for Economics and Market Research, during the Mandaue Business Summit 2025 on Wednesday, Aug. 27, 2025.
The Philippines has been attracting strong interest from both local and foreign players, driven by the rapid rise of cloud services, e-commerce, digital payments and artificial intelligence applications. Property developers, telecom operators and global technology firms have announced multi-billion-peso projects to build hyperscale facilities in Metro Manila and emerging hubs such as Cebu, Davao and Clark.
But the very growth that excites investors has also raised red flags. Data centers are among the most energy-hungry facilities, requiring continuous power and advanced cooling systems to run efficiently.
Javier warned that unless new baseload and renewable projects are brought online quickly, the expected surge could strain the grid, push up electricity prices and erode investor confidence.
Balance mix of baseload, RE
AboitizPower, one of the country’s biggest power producers, cautioned that the Philippines risks losing its competitive edge if it cannot guarantee stable and affordable energy.
“Renewables are important, but they cannot do it alone. Stable and affordable power is crucial, which is why we are still looking at coal as part of the mix. Outside of nuclear, coal remains the most viable fuel for baseload,” said Anton Perdices, AboitizPower Distribution Utilities senior vice president and chief operating officer.
He noted that in the Visayas alone, an additional 150 MW is needed annually — roughly half the output of AboitizPower’s coal plant in Toledo City. Yet no major plants have been built in Cebu since 2016, as developers shifted their focus to solar. The challenge, Perdices added, is compounded by a government moratorium on new coal projects, which limits options for future capacity.
Rhea Navarro, regional chief operating officer of AboitizPower’s Transition Business Group, stressed that a balanced mix of baseload and renewable power is essential to sustain high-growth industries such as data centers.
“Economic growth of seven percent or more in the Visayas requires stable, secure power, and that cannot rely solely on renewables due to intermittency,” she said.
The Department of Energy has set a target of adding 50,000 MW of power capacity by 2040, with renewables expected to account for 35 percent of the energy mix by 2030. But energy stakeholders have long flagged bottlenecks in permitting, transmission and the pace of private-sector investment as barriers to meeting demand on time.
The recent completion of the Luzon-Visayas-Mindanao grid interconnection offers some relief, enabling excess supply from Mindanao to flow into other regions. But executives warn that this will only buy time.
Without new power plants, the cushion will eventually disappear.
“Without serious efforts to expand baseload capacity, we risk losing these opportunities,” Perdices said. / KOC