The Philippines is courting billions of dollars in data centre investment, but a leading business figure has urged the country to prioritise industries that create more jobs and strengthen domestic supply chains, warning that power shortages and geopolitical risks are exposing the limits of its energy system.
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George Barcelon, chairman emeritus of the Philippine Chamber of Commerce and Industry, said data centres consume vast amounts of electricity and water while generating relatively few jobs.
“What we really [should be] pushing the government [for is empowering] industries that would create more jobs. People talk about data centres, but this sector doesn’t create many jobs,” Barcelon said during the opening fireside chat at Eco-Business’ flagship Unlocking capital for sustainability Philippines forum at EDSA Shangri-La, Manila, last week.
Barcelon, who is also president of technology solutions firm Integrated Computer Systems, pointed to Singapore’s tighter regulation of hyperscalers as an example of governments weighing the limited employment benefits of data centres against their resource demands. Data centres currently account for nearly 20 per cent of Singapore’s electricity consumption.
The issue is particularly relevant as the Philippines grapples with the threat of power shortages and rotational brownouts. This August, as well as earlier this year, the Visayas grid has been placed under red alert amid tight supply and multiple power plant outages, prompting the grid operator to warn of impending rotating blackouts.
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For too long, traditional economic models have treated our environment as an external, infinite resource to be extracted and spread. We have treated the liquidation of our forests as economic growth. This is an accounting error with catastrophic consequences.
Atty Analiza Rebuelta-Teh, Undersecretary for Finance, Information System and Climate Change, Department of Environment and Natural Resources
Luzon also faced red and yellow alerts, with transmission company National Grid Corporation of the Philippines implementing or warning of rotational brownouts across several provinces, including Pampanga – where the country’s proposed Pax Silica hyperscaler hub could be concentrated – and parts of Metro Manila as power reserves thinned.
Led by the United States, the Pax Silica initiative aims to position the Philippines as a strategic hub for critical minerals, semiconductor manufacturing and energy infrastructure. Proponents say it could unlock millions of dollars in foreign assistance and attract up to US$100 billion in private investment.
Against this backdrop, adding large, continuous electricity loads from hyperscalers could complicate efforts to strengthen the country’s energy security and transition to cleaner power.
First Gen Group Head of Strategy and Planning Jay Joel Soriano said geopolitical tensions have made the energy transition more urgent as the Philippines seeks to reduce its exposure to external energy supply-chain disruptions while strengthening energy security.
Investors are also concerned about the predictability of the country’s power supply, Soriano said. High electricity prices can be managed, he argued, but sudden price spikes and red or yellow grid alerts make business planning more difficult. Filipino consumers pay some of the highest electricity rates in Southeast Asia – second only to the high-income economy of Singapore.
That matters for hyperscalers, whose electricity requirements can dwarf those of conventional industrial facilities. Barcelon noted that a single hyperscaler can require between 500 megawatts (MW) and 1 gigawatt (GW) of power.
The resource demands extend beyond electricity. The proposed 1,620-hectare Pax Silica site in New Clark City, Pampanga could require up to 3GW of electricity and 39 billion litres of water annually. Earlier estimates from the Bases Conversion and Development Authority put the project’s daily water demand at 130 million litres and electricity demand at up to 3GW – equivalent to 16 per cent of Luzon’s current grid capacity and the water use of about 600,000 households.
The water requirement could become particularly challenging during El Niño season, when rainfall can decline substantially. Current plans plot a mix of solar power and liquefied natural gas, alongside reservoirs and water-recycling systems, to meet the proposed project’s demands.
Barcelon argued that the Philippines should instead use the Pax Silica opportunity to build domestic capacity in critical-mineral processing rather than focus primarily on resource-intensive digital infrastructure.
“We talk much about rare earths, but it’s the processing of the rare earth that is very critical,” he said, noting that the Philippines has critical mineral resources in Samar, Palawan and Zambales.
That gap between extraction and processing is particularly evident in the Philippines’ nickel industry. The country is the world’s second-largest nickel producer and largest exporter of nickel ore, but exports most of its mined nickel as raw material, primarily to China, rather than processing it domestically into higher-value products. The Philippines accounted for 25.41 per cent of global nickel exports in 2024, while mineral exports reached US$7.62 billion in 2025.
Building domestic processing capacity could allow the country to capture more value from minerals it already extracts while strengthening supply chains for batteries, renewable energy and other clean technologies, he underscored.
The Philippines already has a substantial electronics export industry, but remains concentrated in manufacturing and assembly. Electronics accounted for 59.9 per cent of the country’s total exports in June 2026, worth US$5.25 billion.
Soriano said the energy transition itself faces supply-chain constraints because key components for renewable technologies remain concentrated in a small number of countries, including China. The Philippines must therefore be more deliberate about the technologies it deploys and how they fit into the wider power system, he said.
He stressed that energy security requires a diverse power mix rather than an overreliance on any single technology. Solar cannot generate electricity at night, while wind output varies seasonally, making technologies such as geothermal important for providing reliable power, he explained.
The Philippines’ geothermal resources could play a particularly important role, Soriano said, highlighting their ability to provide round-the-clock power while remaining less exposed to geopolitical supply-chain disruptions.
But inadequate grid capacity can also prevent existing power generation from being fully utilised. Soriano cited an Energy Development Corporation facility in Negros Island producing about 220MW against regional demand of roughly 300MW. Surplus geothermal power, he said, cannot be transmitted off the island because of limited grid connectivity and capacity.
“It’s a shame that geothermal, which is 24/7, insulated from all of these geo-economic shocks we’re talking about… [is] being curtailed,” he said, calling for better planning so that grid capacity keeps pace with new generation.
Greater coordination could also help investors navigate the uncertainties facing the energy sector, Soriano said.
“I think uncertainty can be better weathered if we work together to think through the solutions and then think through how we can get through all of these uncertainties,” he said.
For Barcelon, the question is therefore not simply whether the Philippines can attract capital, but whether investments strengthen the wider economy. He said the country should favour industries that can compete on power, logistics and labour costs while creating jobs and broader economic activity.
The debate ultimately comes down to how the Philippines values its natural resources amid large-scale development, said Atty Analiza Rebuelta-Teh, Undersecretary for Finance, Information System and Climate Change, Department of Environment and Natural Resources.
“For too long, traditional economic models have treated our environment as an external, infinite resource to be extracted and spread. We have treated the liquidation of our forests, the depletion of our soils, and the degradation of our marine ecosystems as economic growth. This is an accounting error with catastrophic consequences,” she said in her keynote address at the same event.
“If we deplete this principle, we bankrupt our future,” she said.
