Cebu accounts for 60 percent of provincial BPO expansions      

CEBU, Philippines —  Business Process Outsourcing (BPO) companies continued to expand their operations in 2022, with Cebu accounting for 60 percent of the expansions made outside of Metro Manila.

A report from Colliers Philippines revealed that 221,100 sq. meters (2.4 million sq feet) of office deals outside Metro Manila, nearly double the 113,100 sq meters (1.2 million sq feet) posted in 2021. Cebu accounted for about 60 percent of total provincial transactions followed by Davao (17 percent ), Pampanga (12 percent), Bacolod (three percent), and Dumaguete (three percent).

Among the notable deals in 2022 include spaces taken up by Wipro, Concentrix, and Avant Offices in Cebu, Alorica in Davao, Ubiquity in Bacolod and Laguna, and Asurion and Infosys in Pampanga.

‘In our view, some of these firms have been expanding outside Metro Manila due to attractive rents as well as the availability of high-quality office spaces and skilled manpower,” experts at Collier’s said.

The report indicated that outsourcing firms dominated transactions, covering nearly 70 percent of total provincial deals.

Meanwhile, traditional firms also continue to take up space, occupying offices ranging between 200 and 2,500 sq meters (2,200 to 26,900 sq feet). Traditional firms engaged in logistics, financial, and flexible workspace operators were among the office space demand drivers in 2022.

With the popularity of hybrid work arrangements, Colliers encourages landlords to consider developing more flexible workspaces in key sites outside Metro Manila such as Cebu, Iloilo, Davao, Cagayan de Oro, Pampanga, and Dumaguete as these locations have relatively low flexible workspace stock, and vacancy compared to Metro Manila. Colliers has observed a growing interest in flexible workspaces in these locations from expanding traditional outsourcing firms as well as startups using co-working as incubation spaces to capture future growth from startups.

Colliers recommended that developers complete the delivery of their projects as scheduled “as we have observed increasing inquiries from outsourcing firms, especially in Iloilo, Bacolod, Bulacan, and Laguna.”

Colliers expects the completion of about 380,000 sq meters (4.1 million sq feet) of new office space in Cebu, Pampanga, and Iloilo from 2023 to 2024. “We also encourage developers to be on the lookout for potential demand in key cities such as Iligan, Dagupan, Urdaneta, Malolos, General Santos, Tarlac, Cabanatuan, and Puerto Princesa as these locations are touted as high-potential areas for ‘transformation into digital cities by 2025’ according to the Information and Business Process Association of the Philippines (IBPAP).”  

At present these areas also serve as popular sites for freelancers. Colliers Philippines believes that cities such as Cebu will remain popular among outsourcing firms planning to expand operations outside of Metro Manila.

Over the near to medium term, this interest should be sustained by quality infrastructure, skilled manpower, and local government competitiveness strategies.