BPO office take-up on the decline

Office space take-up of the business process outsourcing (BPO) sector in Metro Manila continued to decline this year, a property services firm said.

In a media briefing yesterday, Leechiu Property Consultants (LPC) chief executive officer David Leechiu said BPO office take-up in Metro Manila waned in the past two years from 485,100 square meters in 2016 to 289,819 sqm in 2018, a 40 percent drop.

The 2018 figure is also 19 percent lower than the 357,999 sqm take-up in 2017.

“The slowest we’ve ever seen them and it’s alarming,” Leechiu said.

He said one of the reasons for the decline is the diversification of the BPO firms’ location portfolio.

However, Leechiu emphasized that some of these global BPO firms have already completed their diversification programs and are expected to return to the country in 2019.

“They have diversified outside of the Philippines in 2017, 2018 and now that they have done that, they are going to come back here due to the rapidly rising cost of labor in the US.”

Leechiu said the goverment must be able to facilitate the expansion of the BPO industry, in order to capitalize on these opportunities.

“I would encourage government to keep facilitating the expansion and nurturing the expansion of the BPO industry,” he added, noting that the sector is still the country’s largest employer.

This can be done by promoting approvals for more Philippine Economic Zone Authority (PEZA) accredited space and as well as facilitating more investments in education and retooling the skills set of workers.

Meanwhile, LPC reported that demand for office space in the Philippines reached a record high of 1.5 million sqm this year, with Metro Manila accounting for 74 percent at 1.16 million from 910,000 sqm last year.

“The figure included precommitments by BPO tenants competing for scarce PEZAaccredited spaces to be completed in 2019 in the capital,” LPC said.

Outside of Metro Manila, Clark Global City registered the highest office demand at 156,000 sqm, while Cebu and Laguna followed, posting 133,000 sqm and 46,000 sqm., respectively.