PHILIPPINE data center operators must strengthen energy and water security to stay competitive against regional peers akin to Vietnam and Malaysia in attracting artificial intelligence (AI) and cloud investments, based on ESGpedia, which said infrastructure readiness is becoming increasingly critical as Southeast Asia emerges as a significant digital infrastructure hub.
Jozsef Acabo, vice-president at ESGpedia, said operators within the Philippines must prioritize “operational readiness,” particularly stable access to electricity and water resources needed to support large-scale digital infrastructure operations.
“I should say two fronts. First is disclosure,” he said in an internet interview on Tuesday. “After which the second front could be operational readiness. How do you ensure data center operations or your operations have a sufficient source of energy in addition to water?”
“So, those two categories, right? And you may have as much disclosure and certifications as you’ve gotten, but you can not really ignore, specifically within the Philippines, operational readiness,” he added.
Data centers are amongst essentially the most energy-intensive infrastructure assets because servers, storage systems, networking equipment, and cooling systems operate constantly. Water can be critical for a lot of cooling systems utilized in large-scale data center facilities to dissipate heat generated by high-density computing equipment.
Mr. Acabo described electricity as the first operational requirement for data centers, while water stays a vital secondary resource.
“While you say operational readiness, it covers risks and, after all, opportunities as well, particularly the major source of your operations, which again, bulk of it’s energy,” he said. “The secondary could be water.”
The comments come as Southeast Asian countries compete to draw hyperscalers, cloud providers, and AI-related infrastructure investments amid growing demand for computing capability across the region.
Mr. Acabo said the Philippines retains benefits due to its strategic location and English-speaking workforce but warned that infrastructure limitations could affect its competitiveness relative to neighboring markets.
“The sources of energy and water and the infrastructure won’t be as agile and weatherproof, I should say, or ready for more use in comparison with, say, Vietnam or Malaysia, right, where data centers have been popping up really recently,” he said.
“And so, you’ve gotten competitors across other neighboring countries which have more, I should say, more established infrastructure in order that data center operations will thrive,” he added.
SUSTAINABILITY REPORTING
Beyond securing reliable power and water supply, Philippine data center operators are also facing increasing pressure to enhance emissions transparency and sustainability reporting as global investors and hyperscalers increasingly prioritize renewable energy sourcing and climate disclosures.
“If you find yourself in a knowledge center operation, intensity levels of your disclosure are very vital, not only for local compliance, but additionally for global or international investors,” Mr. Acabo said.
He said sustainability reporting is becoming increasingly vital for operators in search of to draw overseas clients as Southeast Asian countries adopt carbon pricing mechanisms and stricter environmental requirements.
“One particular example is that for those who are operating a knowledge center service within the Philippines, you actually would love to get not only local Philippine clients, which is your priority, but additionally attract clients outside the Philippines,” he said.
“And if you try this, meaning the primary obvious prospects and clients could be Southeast Asian countries,” including Singapore, Malaysia, Thailand, Indonesia, and Vietnam, he added.
Singapore currently imposes a carbon tax, while other countries within the region are considering similar pricing mechanisms, based on Mr. Acabo.
“In case you are trading your services for Singapore, it’s essential to report your carbon footprint,” he said. “The federal government put a tax on per ton of your carbon footprint.”
“And so if you’ve gotten your carbon footprint refrained from some assurance, otherwise you haven’t double checked that data, you then is perhaps losing a few of those dollars that you simply earn towards carbon tax,” he added.
Mr. Acabo said accurate and verifiable emissions reporting is becoming increasingly vital as regional clients and investors place greater scrutiny on sustainability compliance and operational efficiency.
He also cited the implementation of the Philippine Financial Reporting Standards (PFRS) S1 and S2 sustainability disclosure frameworks as an emerging compliance requirement for giant corporations and their subsidiaries.
“The upcoming PFRS S2, which is implemented now, and top tier corporations will begin to report by submission in April 2027, is the, I suppose, the brand new and pressing matter,” he said.
“Most, if not all, data center operators within the Philippines without delay are connected to a tier one listed parent company or group,” he added. “And so, they are usually not just pressured, but they need to adopt and report and open up to their parent company their material topics and climate impact.”
The Securities and Exchange Commission earlier adopted PFRS S1 and S2 sustainability disclosure standards, with phased implementation for giant, listed firms starting in 2027.
Despite the challenges, Mr. Acabo said the Philippines stays well positioned to learn from the continued expansion of digital infrastructure investments across Southeast Asia as corporations diversify operations amid geopolitical uncertainty.
“We’re strategically situated. We’re a nation of English-speaking people. So those are to our advantage,” he said.
“There are also some areas we’d like to enhance as well.”
ESGpedia is a sustainability data and technology platform that helps corporations manage environmental, social, and governance (ESG) disclosures, sustainability reporting, and carbon accounting across supply chains and investment networks. — Juliana Chloe A. Gonzales