Philippine BPOs head to the provinces as Manila wages rise: PRIME
- BPO firms are expanding into Visayas and Mindanao cities as Metro Manila costs rise.
- Metro Manila’s latest minimum wage increase was P60 ($1.03).
- Limited Grade A offices and utility gaps constrain provincial expansion.
- One BPO took a full new office building at Robinsons Cybergate in Dumaguete.
MANILA, PHILIPPINES — Rising wages in Metro Manila are sending business process outsourcing (BPO) firms to provincial cities, where labor is cheaper and recruiting is less crowded, but where office space and utilities often lag behind. The capital’s latest P60 ($1.03) minimum wage increase is adding to that pressure.
Wage hikes reshape site selection
Real estate consultancy PRIME Philippines laid out the trend at its third-quarter market briefing, BusinessWorld reported, pointing to a run of increases in the National Capital Region (NCR).
“If you take a look at the past five years, the wage hikes for NCR were between P20, P30, P40, and now P60,” said Sean Grantley Chua, PRIME Philippines manager for research and advisory.
“So, how do you mitigate that as an expanding BPO firm? You go to areas that have cheaper labor, for lack of a better way of saying it,” he said.
Wages are only part of it, as firms in cities crowded with BPO players must also outbid each other for recruits, Chua said. Some firms also want to move early, said Hannah Yoshida, PRIME senior head for VisMin markets, so that local hires in emerging markets can grow into future leaders.
Office supply lags demand
The catch is infrastructure, with PRIME pointing to limited Grade A offices and unreliable electricity and internet access in smaller markets. In Tier 3 cities such as Zamboanga and Dumaguete, many BPO firms are making do with the upper floors of commercial arcade buildings, Chua said.
Better space is starting to arrive, and at Robinsons Land Corp.’s Robinsons Cybergate in Dumaguete a single BPO firm took an entire new office building after outgrowing a one-story site.
“There is still demand that needs to be met in these Tier 3 to 4 cities, although maybe the scale won’t match that of the zone like in Makati or central business districts,” Chua said.
For buyers, provincial sites can lower labor costs and reduce attrition from poaching, but they bring infrastructure risks that Metro Manila sites do not.
Clients moving contact center or offshore outsourcing work to Tier 3 cities should check backup power, redundant internet links and business continuity plans before signing.
Firms comparing partners can review the top 40 BPO companies in the Philippines and ask where each is opening seats outside Manila.
Related news
- IT-BPM firms follow talent to Philippine provinces: SM offices · 15 Aug
- Philippine BPO boom drives 20,000 job openings in Western Visayas · 4 Jul
- Cebu’s BPO boom hits a wage and AI crossroads · 2 Jul
Disclosure: Outsource Accelerator uses AI tools in the backend of its editorial workflow. Every article is reviewed and verified by a human editor before publication.
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