Demand for BPO office space in Metro Manila region beset by ongoing uncertainties

Demand for BPO Office Space in Metro Manila Region Beset by Ongoing Uncertainties

The business process outsourcing (BPO) sector’s demand for office space in the Metro Manila areas is likely to be beset by uncertainties for the foreseeable future, according to a recent analysis by the Philippines office of Jones Lang LaSalle (JLL), one of the world’s largest real estate agencies. Taking an overview of the current situation, Janlo de los Reyes, the company’s head of research and consulting, said the recent enactment of the Comprehensive Income Tax and Incentive Rationalization Act (CITIRA) bill, in conjunction with the moratorium on new economic zones in the Metro Manila region, had created a degree of paralysis in the sector, with stakeholders seeking clarity as to future developments, while the government has yet to go public with exact details of the new regulatory requirements and any related incentives.

Among outsourcing companies, meanwhile, he said, concerns remain as to the proposed transition timeline for the changes in fiscal incentives outlined in the CITIRA bill, as well a lack of available detail on the incentives on offer from the Philippine Economic Zone Authority with regard to any newly accredited Metro Manila-based office towers. De los Reyes also noted that JLL’s report for the period Q4 2018-Q3 2019 indicated that outsourcing companies still account for 44% of overall demand for office space in the Metro Manila region, with offshore gaming operators coming in second at 32%. Despite this, he said it was now expected that demand from offshore gaming operators will overtake demand from BPOs in the next quarter regardless of the government’s ongoing efforts to rein the industry in.

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