With the business process outsourcing (BPO) sector likely to be among the first to see an uptick in demand, Colliers Philippines believes it could play a vital role driving a property market recovery across the country. This would be similar as to how the industry led a turnaround in the aftermath of the 2008 global financial crisis.
“Right now similar to what happened during the global financial crisis, outsourcing as a strategy to recover and rebuild will be significant moving forward,” Colliers Philippines Director for Office Services Dom Frederick Andaya was quoted as saying by PNA. “The first surge of demand is expected to come from the United States as the country’s economy is already reopening.”
According to Colliers Philippines, there is currently 1.78 million square meters of available office space in Metro Manila which the BPO sector will help fill. Additionally, firms may look to Cebu, Pampanga, Iloilo, Bacolod and Davao among other locations.
Andaya believes there are a few trends worth watching as it relates to the BPO sector and a greater property market recovery. The adoption of a hybrid work model along with the availability of IT parks and buildings registered with the Philippine Economic Zone Authority (PEZA) will influence office leasing decisions.
“Some of them are studying (the situation), but some of the questions are the following: Are the PEZA-registered enterprises allowed to shift from other investment promotion agencies like Board of Investments which does not require companies to operate within specific locations, that means they will have the flexibility to implement their hybrid work model strategy,” Andaya stated.
This could also lead to businesses embracing geographical diversity to help them in case of another pandemic. As was seen in the Philippines, some areas were less affected by COVID-19 and were allowed to resume operations sooner. The practice could help companies in the BPO sector avoid total shutdowns in the future.
“The Philippine government is willing to apply different treatments to different regions of the country, depending on the level of the pandemic in a given region,” Morgan McGilvray, Senior Director, Occupier Services & Commercial Agency at Santos Knight Frank, said. “For companies, that could mean setting up a secondary office far outside of the NCR–most likely in secondary cities in order to maintain continuity of their operations in the event of another NCR lockdown.”