Office Space Demand In Manila Falls As BPOs Delay Expansion Plans

Property developers in Metro Manila saw a 45% decline in office space demand in the first half of this year due to the decision by BPO firms to postpone expansion plans brought about by the moratorium on new economic zones. The government’s move to encourage BPO companies to set up business, or expand their existing operations, outside Metro Manila met with resistance from the sector, which claimed that the provinces lack the required infrastructure and skilled workforce.

The BPO firms maintained their stand against being pushed out, but are prepared to expand their operations in free economic zones in Metro Manila, where they are given tax incentives. The country’s BPO industry posted a growth of 5.1% in 2018 instead of the projected 8%, according to the Contact Center Association of the Philippines. The slowdown could be attributed to the greater use of chatbots and advances in technology, among other things. Realtors are now targeting traditional businesses in sectors such as healthcare, and food and beverages, while the BPO industry adopts a “wait-and-see” approach.

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