Cebu as next Silicon Valley?: Looming power shortage weakens Cebu’s potential

[Mike J]

Interesting read, but I just cannot see Cebu becoming the next Silicon Valley.  And power is not the biggest issue in my opinion.  The best and brightest in IT are moving to other countries where they can make much more money.  I was the manager for the billing and payroll department of 100 million plus revenue company.  Knowing I have a Filipina wife and contacts in Cebu, the president of the company wanted my opinion to contract out those departments to one of Cebu's BPO companies.  I said no because BPO works best with very structured procedures.  Our billing and payroll was, in my opinion, too complex to be sent off shore.  Too think that BPOs could somehow transition in a Silicon Valley is way too optimistic in my opinion. 

"Cebu dreams of becoming the next Silicon Valley, and experts believe this is possible."  But then I am not an "expert".  

https://www.philstar.com/the-freeman/cebu-business/2024/08/01/2374606/cebu-next-silicon-valley-looming-power-shortage-weakens-cebus-potential

CEBU, Philippines — Cebu has to speed up its efforts in securing additional power supply contracts, otherwise, it may lose its potential to become the next Silicon Valley.

“The lack of cheap, reliable, and abundant electricity poses a major challenge and risk to the dream of Cebu becoming the next Silicon Valley. A global center for high technology and innovation is always largely dependent on the electrical grid, especially with the emergence of energy-intensive - AI technologies and data centers,” said Mandaue Chamber of Commerce and Industry (MCCI) president Marc Ynoc.

According to Ynoc, Cebu’s looming power shortage is a serious concern as this also impacts other sectors of society with several multiplier effects due to the potential weakening of its entrepreneurial ecosystem.

“Venture Capital Investors or Foreign direct investors have matrices to determine which country has the best potential for investments. Electricity rate always remains as the top key attraction in the list,” Ynoc explained.

As a basis, electricity costs account for nearly 40 percent of the whole operations cost in the manufacturing industry.

According to Ynoc, the Philippines’ power rate is one of the highest in Southeast Asia. “This is the primary reason why large Western companies that are moving out of China have preferred to have our neighboring countries such as Indonesia, Malaysia, Vietnam and Thailand as their next expansion destination.”

Business leader Steven Liu likewise warned that the power situation of Cebu will be part of the consideration of any new direct investment into Cebu.

“For now, while our power supply backup seems to be thinning, we are supported by the upcoming expansions of baseload and new renewable energy plants (primarily solar plants), coming onboard in the immediate next few years. We should also tap more private sector partners to enroll in the load sharing scheme like Meralco’s expansive partners. Consumers are encouraged to conserve energy and use green appliances and lightings (inverters and LEDs),” suggested Liu.

Moreover, in consideration of overall demographic situation, “we should continue to be allowed to invest and build new baseload power plants to cover our medium-term energy requirements,” stressed Liu.

According to Liu, Cebu’s economy relies more on BPOs (Business Process Outsourcing) manufacturing, tourism and industries. These industries continue to provide its constituents. “Hence, a stable and sufficient power supply is a must for its survival.”

For his part, acting Cebu City Mayor Alvin Garcia said he believes the city will not experience an electricity shortage shortly. Nonetheless, the city is taking steps to ensure that the city will have sufficient power supply.

“We have to invite investments from the private sectors, especially the power generation companies already here. We only have to let them expand their capacity to supply power to Cebu Island,” Garcia said.

The Department of Energy (DOE) projects that energy demand for Cebu Province will  reach around 1,400 MW in the next two years and will outpace supply by 2027 unless new baseload power plants are constructed.

Visayas has a generating capacity of 2,454MW and a system peak demand of 2,153MW or a margin of only 239MW as power reserves.

Cebu province accounted for half of the region’s total demand and within Cebu, Metro Cebu, falling under the Visayas Electric franchise area, contributed to over 500 megawatts, representing more than half of the province-wide demand.

The record showed that Central Visayas is the fastest-growing regional economy in the Philippines, with a growth rate of 7.3 percent in 2023, or an estimated P1.38 trillion, up from P1.29 trillion in 2022.

Cebu's capacity to expand its high-value outsourcing jobs, particularly in Knowledge Process Outsourcing (KPO), has attracted more multinational companies to establish research and development (R&D) sites in the region. These companies are leveraging the rich pool of engineers, data analysts, and high-value talents available in Cebu.

Cebu dreams of becoming the next Silicon Valley, and experts believe this is possible. However, achieving this goal requires more than just talent and venture capital; it also demands robust infrastructure support, including a stable power supply.

 

Edited July 31 by Mike J

[Lee]

1 hour ago, Mike J said:

Interesting read, but I just cannot see Cebu becoming the next Silicon Valley.

I can't see any city in the PI as the next Silicon Valley.

IMO math, science and English skills will always hold this country back.

[Jack Peterson]

 FGS if people don't like it here  You flew in you can always Fly out

[jimeve]

16 minutes ago, Jack Peterson said:

 FGS if people don't like it here  You flew in you can always Fly out

Amping Dong.

[Mike J]

1 hour ago, Jack Peterson said:

 FGS if people don't like it here  You flew in you can always Fly out

Ten plus years for me and I very much like it here, but Cebu City is highly unlikely to be the next Silicon Valley.

[Jack Peterson]

1 minute ago, Mike J said:

Ten plus years for me and I very much like it here, but Cebu City is highly unlikely to be the next Silicon Valley.

 Maybe, BUT that does not give excuses for continually keep putting the locals down, We would not like it if they or any others did it about our own countries smf that is what is happening on this and other recent Topics Nough said Point made 

[Mike J]

20 minutes ago, Jack Peterson said:

 Maybe, BUT that does not give excuses for continually keep putting the locals down,

One of the reasons this forum has been successful while others disappear is because of the honesty in posting.  We do not denigrate the Philippines with disdain or hate, but neither do we put on rose colored glasses and say you can "live like a king on $1000".  Posting the pros and cons of living here is of value to expats and folks who are considering moving here.  If you disagree with a post, tell forum members why instead of telling them to go home.  

[Jack Peterson]

2 minutes ago, Mike J said:

If you disagree with a post, tell forum members why instead of telling them to go home.  

 I did but you obviously really don't like the truth Members here are not posting because you and others DO put the philippines down and as a Mod You should be guarding this instead of  letting it fester, my 16+ years here has noted all that comes out, I answer where I feel it fits, I read posts to understand Not just to Post, as I said Nugh said 

[Mike J]

2 minutes ago, Jack Peterson said:

I did but you obviously really don't like the truth

Okay then, so tell me the truth that I don't like?????

[Jack Peterson]

1 minute ago, Mike J said:

Okay then, so tell me the truth that I don't like?????

 Not Biting BUT I will remind you when the issue arises