The Working Pinoy

BPO Industry to Make a Strong Comeback in 2018

Expect the business process outsourcing (BPO) industry to make a strong comeback this year as a result of the improved relations with the U.S., which can lead to office space take-up reaching a record high. This can also help push Metro Manila into one of the top office markets in Asia.

President of property consulting firm Leechiu Property Consultants (LPC), David Leechiu, predicted that rental rates in Metro Manila for Philippine Economic Zone Authority (PEZA)-accredited buildings may increase up to 15% next year while non-PEZA buildings with online gaming tenants may still get 10%.

He also expressed optimism in the office property take-up in the metro reaching a record high. Leechiu said in an interview that if Metro Manila reach the LPC-projected 800,000-850,000-sqm office take-up next year, it would leapfrog to be the third biggest office market in the region behind Shanghai and Beijing.

In 2016, the BPO sector took up 480,000 sqms of office space. This year, from January to November, the sector’s take-up is only 350,000 sqms–a 28 percent decrease from last year’s total transactions year-to-date. Leechiu, however, is confident that the office take-up in 2018 will be a different story.

Currently, LPC is helping some of the world’s largest companies–among them are top 20 companies in terms of market capitalization–set up shared services hubs in the Philippines. This can easily take up 100,000-130,000 sqms within this year according to Leechiu.

Online gaming firms are also contributing in this BPO resurgence. In fact, when compared to last year’s level, their take-up of office space increased to 306 percent.

Despite all the challenges that may have contributed in slowing down the BPO industry such as conscious diversification by Western companies, difficulty in securing PEZA accreditation, etc., Metro Manila’s office take-up is still projected to end at an all-time high of 750,000 sqms this year. Total take-up in the metropolis as of end-November is at 738,305 sqms or 16 percent higher than the take-up of 630,000 sqms for 2016.

With the reaffirmed relations between the U.S. and the Philippines and the positive feedback on the Philippine Tax Reform Program, Leechiu is positive that the BPO sector is poised to make a comeback in 2018.

via Inquirer / Doris Dumlao-Abadilla

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