At least two hyperscalers—entities providing cloud, networking and internet services—from the United States and China could set up shop in the Philippines within the year, the Department of Trade and Industry (DTI) said on Wednesday.
Trade Undersecretary Ceferino Rodolfo said at an event that they are currently in talks with several hyperscalers from the US and China to secure investments. These include Microsoft Azure, AWS, Google Cloud and Alibaba Cloud.
“We are targeting hyperscalers, in particular those who are very conscious in reducing their carbon footprint and also our potential source of investments in renewable energy,” he said.
The level of discussions ranges from exploratory to advanced, Rodolfo noted. “I’m pretty sure that within this year, we could have at least one Chinese hyperscaler and at least one US hyperscaler,” he said.
While Rodolfo said he cannot disclose yet further details on the said investors, he said that a separate company is eyeing an $800-million investment.
The trade official said the potential investors are looking at the country’s green energy market and studying the regulatory environment on data protection.
Trade Secretary Ramon M. Lopez, meanwhile, said hyperscalers support digital-native industries, including financial technology and digital banking. Both have seen increased usage since last year amid mobility restrictions.
The trade chief said hyperscalers’ investments in tools and intellectual property will make cloud technology more affordable, which will benefit customers.
Hyperscale platforms, Lopez said, enable users to manage large volumes of activity and data, in addition to integrating with other systems.
“Their [hyperscalers] increased presence will create a multiplier effect, especially with the potential increase in demand for renewable energy and data center developers.”
Lopez said that artificial intelligence (AI) is supported by hyperscalers’ platform, which he identified as one of the country’s digital economy growth drivers.
The trade department launched in May the AI roadmap, which aims to increase adoption and utilization of AI in various sectors in the country to advance industrial development. These include agriculture, automotive sector, smart manufacture, healthcare services and business process outsourcing.
The roadmap seeks to set up the private sector-led National Center for AI Research, which will serve as the shared hub for research and development in AI.
The DTI chief said hyperscalers may avail of tax incentives cited in the Corporate Recovery and Tax Incentives for Enterprises Act under the Strategic Investment Priorities Plan.
Some of the perks include availment of income tax holidays of four to seven years, depending on the level of technology and location of the project. This will then be followed by 10 years of enhanced deductions or 5-percent special corporate income tax for export-oriented firms.