THE BUSINESS process outsourcing (BPO) industry is expected to usher recovery of the property market like what the sector did during the 2008 global financial crisis, according to Dom Frederick Andaya, Director for Office Services of Colliers Philippines.
In a market briefing, Andaya
said strong demand for office space is expected from the BPO sector as the
United States economy has started to open up. “Right now similar to what
happened during the global financial crisis, outsourcing as a strategy to
recover and rebuild will be significant moving forward,” he said.
He said the industry is
expected to expand by 8% in revenues and full-time employees, with drivers of
growth in financial services, banking, insurance, and high level works such as
software development and game development, among others.
Andaya said BPOs would help
in the absorption of available office space in Metro Manila currently at 1.78
million square meters or equivalent to 60 vacant buildings with a leasable area
of 30,000 sqm per building, adding the absorption period for the 1.78 million
sqm vacant office space will be around 3.5 years.
Aside from Metro Manila, BPO
companies are looking for office spaces in the provinces of Cebu, Pampanga,
Iloilo, Bacolod, and Davao.
The property market expert
said the adoption of a hybrid work model, combining on-site and work-from-home
work arrangements, as well as the availability of IT parks and buildings
registered with the Philippine Economic Zone Authority (PEZA) could also affect
the investment strategies of companies, particularly BPO firms.
“Some of them are studying,
but some of the questions are the following: Are the PEZA-registered
enterprises allowed to shift from other investment promotion agencies like BOI
(Board of Investments) which does not require companies to operate within
specific locations, that means they will have the flexibility to implement
their hybrid work model strategy,” Andaya added.
Trade Secretary and BOI chair
Ramon Lopez also confirmed that BPOs can get the same incentives under the
CREATE Law whether they register with PEZA and BOI.
CREATE Law is short for
“Corporate Recovery and Tax Incentives for Enterprises” which is the
second package of the Comprehensive Tax Reform Program that reduces the
corporate income tax rate from 30% to 20%.
For companies registering
with PEZA, they are required to locate inside PEZA-registered IT parks and
buildings or economic zones, while companies can locate anywhere when
registering with BOI.
Colliers is a leading
diversified professional services and investment management company with
operations in 65 countries and more than 15,000 enterprising professionals who
work collaboratively to provide expert advice to real estate occupiers, owners
and investors. (Kris Crismundo)
