Property consultant Colliers said the outsourcing industry will continue to be a driver of recovery in the office real estate market.
Colliers said the information technology—business process management (IT-BPM) industry, will continue to grow organically or through more mergers and acquisitions, highlighting the Philippines’ attractiveness as outsourcing hubs globally.
“The past consecutive quarters delivered a freer business landscape in the Philippines, with the lifting of the lockdown and relaxing of most social distancing protocols for the public. These fueled the momentum of IT-BPM companies — especially those winning new accounts — to look at their real estate portfolio and balance it with the desire of employees to continue the hybrid work model,” it said.
Colliers said in the second half of 2022, office transactions involving the IT-BPM sector totaled 113,663.80 square meters (sq.m.). This figure increased to 124,681.99 sq.m. in the first half of 2023.
Given the continued support of government agencies like the Philippine Economic Zone Authority’s (PEZA) and the
Board of Investments (BOI), Colliers said outsourcing “will continue to dominate revenue forecasts and is even expected to overtake remittances from overseas Filipino workers (OFW) in the next five years.”
“Even with the proliferation of AI (artificial intelligence)-supported technologies, outsourcing in the country will skill up and provide more complicated support, leaving the routinary tasks to AI bots and scripts,” Colliers said.
In the second quarter of the year, Colliers noted take-up in office space by outsourcing firms was highlighted by the 20,500-sq.m. lease transaction of Emerson in Ortigas Center, Mandaluyong, followed by Telus at 13,100 sq.m. in Quezon City, and OP360 expansion in Cebu and Cagayan de Oro at 11,200 sq.m.
“Colliers notes that provincial office take-up has been consistent at almost 25 percent of all office transactions for the last three quarters. We see this as a continuing trend for outsourcing companies because of the availability of talent outside Metro Manila and the ongoing infrastructure developments in different provinces in the country,” Colliers said.
It noted that with the government’s continued help, the Philippines continues to attract investment and interest from global firms.
Colliers said the IT-BPM Roadmap 2025 will serve as “comprehensive guidepost, offering a clear vision of the industry’s goals, aspirations, and anticipated evolution,” Colliers said.
“Part of this road map is the identification of the next 25 digital cities in the Philippines that are ready for the next wave of outsourcing growth. The push of government to establish other locations for outsourcing work follows its thrust to promote locations outside Metro Manila and spread economic development to other regions in the Philippines,” Colliers said.
“Global events may totally derail or push the global outsourcing market into decline or success. The only thing the Philippines can do now is focus on what made the country the top choice for outsourcing and work doubly hard not to lose that edge,” it added.
