SM Investments delays data center plans in the Philippines

SM Investments Corp. (SMIC) has postponed its plans to enter the data center market in the Philippines. High electricity costs and frequent typhoons are making it difficult to attract foreign investors. Instead, many are looking at neighboring countries like Malaysia and Vietnam, which offer cheaper power. Frederic DyBuncio, the president and CEO of SMIC, shared these insights during a recent media event. He noted that potential investors are hesitant because they believe the Philippines faces too many natural disasters. They also find the high cost of electricity a major concern. Data centers require a stable power supply, and any interruptions can disrupt business operations. Despite putting initial plans on hold, SMIC is not abandoning the data center market entirely. DyBuncio mentioned that the government’s goals for renewable energy remain appealing to foreign companies. Last year, he announced intentions to explore opportunities in the data center space due to rising demand for data storage and the increasing use of artificial intelligence. Currently, the Philippines is lagging in the Southeast Asian data center market. A report last December revealed that it had the lowest power capacity per person compared to its neighbors. However, there is potential for growth, with a 1,364-megawatt development pipeline in progress. SMIC remains optimistic about the country's economy, anticipating improvements in consumer spending. DyBuncio expressed a commitment to contribute positively to local communities. Recently, SMIC launched a significant ₱60 billion share buyback program, which is set to be the largest in Philippine corporate history.