A year of… longer land tenure, targeted incentives and broader renewable procurement pathways
The Philippines is a dynamic and emerging data centre market, valued at US$633 million in 2024 and expected to grow at a CAGR of 20.89% to reach US$1.97 billion by 2030.
The Philippines government has been actively promoting the development of data centres through various incentives and regulatory support, positioning the country as an attractive destination for investment.
Recent legislative changes have further strengthened the investment environment, including the extension of maximum lease terms for foreign investors.
The country faces challenges such as foreign ownership restrictions and existing utility infrastructure limitations. But an increased focus on sustainability, and the country’s commitment towards renewable energy initiatives and government support, provides opportunities for growth in the data centre market.
Data centre statistics provided by DC Byte.
Spotlight on key drivers
The Philippines government offers a range of incentives to attract data centre investments, including tax holidays, tax and duty exemptions on imported items, tax credits and additional deductions.
The Philippine Economic Zone Authority monitors and evaluates the developments and requirements of ecozones (where data centres are permitted), providing a favourable environment for investment.
The 2022 Strategic Investment Priority Plan (SIPP 2022) and the Corporate Recovery and Tax Incentives for Enterprises Act of 2021 (Tax Incentives Act) also offer enhanced deductions and preferential corporate income tax rates for data centres.
The Department of Energy has set ambitious targets for renewable energy, aiming for a 35% share of renewable energy in the national electricity generation mix by 2030 and 50% by 2040.
The Green Energy Option Program (GEOP) allows new connections with an estimated monthly peak demand of ≥300kW to draw power directly from renewable energy sources. These initiatives provide data centres with opportunities to adopt sustainable practices and reduce their carbon footprint, as well as ensuring secure grid connection.
The maximum duration of long-term leases of private land granted to foreign investors has been extended from 50 years (renewable by a further 25 years) to 99 years.
Republic Act No. 12252 amended the Investors’ Lease Act of 1993 to allow an aggregate lease period for private land of up to 99 years.
This extended lease period is available for investments (such as the development, construction and operation of a data centre on the leased land) that have been officially approved, evaluated and registered with a Philippine Investment Promotion Agency such as the Philippine Economic Zone Authority or Board of Investments. This allows the terms of private land leases in the Philippines to be comparable in the region.
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