Despite the decline in office take-up in 2017, the Business Process Outsourcing (BPO) industry is likely to make a resurgence next year, a property consultant said.
Reaffirmed Philippine relations with the US and the foreseen advantages of the Tax Reform Acceleration and Inclusion (TRAIN) bill to the industry may pave the way for BPO resurgence, said David Leechui, CEO of Leechui Property Consultants.
As of Nov. 30, 2017, the office take-up of the IT-Business Process Manufacturing (IT-BPM) sector expanded to as much as 349,506 square meters (sqm) or 28 percent lower than the 485,100-square meter take-up in 2016.
A good growth indicator, Leechui said, is that some of the world’s largest companies are setting up shared service operations in the country that will employ tens and thousands of Filipinos.
“This serves as reassurance for the rest of the world that all is well in the Philippines,” he said.
Aside from the BPO-friendly tax reform, Leechui said the resurgence of the IT-BPM sector can also be attributed to the Fitch credit ratings upgrade for the Philippines to BBB from BBB-.
Security risks, anti-Western statements, and reports of extra-judicial killings pushed some BPO industries to hold their expansions in 2017.
"Many of our clients decided not to grow in 2017 because of country risk issues," Leechui said earlier this year.
Meanwhile, the property consulting firm predicts that office take-up for 2017 will register an all-time high of 750,000 sqm, with 728,305 sqm as of Nov. 30, 2017 or 16 percent more than the office take-up in 2016 of 630,000 sqm.
“Exponential growth from the offshore online gaming industry fueled robust office demand and more than made up for a slack from the IT-Business Process Manufacturing industry,” Leechui said.