IT-BPM sector drives Philippine office market recovery as POGOs exit
MANILA, PHILIPPINES — The Philippine IT-business process management (IT-BPM) sector is spearheading the recovery of the country’s office real estate market, filling the gap left by the departure of offshore gaming operators (POGOs).
A new report from Leechiu Property Consultants reveals the industry leased 365,000 square meters of office space in the first half of 2025—already nearing pre-pandemic levels—as global firms expand operations in the country.
IT-BPM absorbs vacancies, reduces office space surplus
The vacancy rates are plummeting, with only 203,000 square meters of office space vacated in quarter two of 2025, compared to 267,000 square meters in quarter one and 312,000 square meters at the end of 2024.
According to Mikko Barranda, Director of Commercial Leasing at Leechiu Property Consultants, business process outsourcing (BPO) companies are no longer leaving spaces. Still, they are increasing the office space they need. Industries like healthcare, banking, and insurance are also requiring larger spaces.
“Healthcare, hotels, insurance, banking, they’re coming in here and instead of committing to a small number of people, they’re looking to move big,” Barranda told ABS-CBN News.
Outsourcing expansion and hybrid work fuel growth
Barranda observed that foreign investors are committing to bigger office spaces, avoiding experimental expansions in Africa or Latin America amid economic uncertainty.
David Leechiu, the Chief Executive Officer (CEO) of Leechiu, attributed the trend to cutbacks by U.S. companies that have the potential to send additional outsourcing work to already identified centers, such as the Philippines and India.
“The tariffs just add uncertainty and uncertainty means cost cutting for the world and cost cutting means more jobs for the Philippines and India. This is not the time anymore to experiment on Africa, on Middle East, on Latin America,” he said, referring to possibly more U.S. companies sticking with existing offshore offices.
The growth of the IT-BPM sector is likely to proceed despite risks such as U.S. tariffs, which are further decreasing the national vacancy level, currently at 18%, or 3.2 million sqm.
Office vacancy rates by region (Q2 2025)
| Region | Vacancy Rate |
| Bonifacio Global City (BGC) | 10% |
| Makati | 15% |
| Ortigas/Mandaluyong/San Juan | 18% |
| Quezon City | 19% |
| Bay Area | 27% |
| Alabang | 25% |
| Taguig | 25% |
Source: Leechiu Property Consultants
Investor confidence in Philippine BPO resilience
The level of leasing is excellent, indicating that investors once again have confidence in the Philippines as an outsourcing center. The country is already a favorable place, given its mature IT-BPM ecosystem, skilled talent, and favorable business environment, which sets it apart from volatile markets.
The Philippine office market is experiencing sustained growth as companies consolidate their operations in established offshore destinations, with the IT-BPM sector leading the way.
This rebirth of IT-BPM is not only breathing new life into the office market, but it is also deepening the Philippines’ status as a prominent global outsourcing center.
The future growth rate of the industry appears stable in the long term, driven by current policies that promote hybrid work and other economic factors stimulating demand.
