The Information Technology and Business Process Management (IT-BPM) sector continues to play a key role in the Philippines’ economic growth, especially in the office space market. According to Colliers Philippines’ latest report, the IT-BPM industry showed impressive growth in 2024, influencing office space demand and transactions in Metro Manila and provincial areas.

In 2024, the IT-BPM industry saw a 7 percent revenue increase, reaching $38 billion, up from $35.5 billion in 2023. This growth was reflected in the office space market, with 424,531.12 sq.m. of office space transacted across the country. IT-BPM companies accounted for nearly 44 percent of all office space transactions, showing the sector’s strong influence on the real estate market.

In Metro Manila, the IT-BPM sector accounted for 246,672.36 sqm. of office space, showing high demand in the capital’s business districts. But office space demand also surged in provincial areas, with 177,858.76 sqm. transacted. This shift highlights a growing trend of IT-BPM companies expanding beyond Metro Manila into areas like Davao, Cebu and Iloilo, where they can benefit from lower costs, a skilled workforce and government support.

Even with increased demand, 2024 also saw a change in how office space is used. While 49 percent of office transactions were for expansion, many IT-BPM companies reduced their office space due to the growing adoption of hybrid work models. The CREATE MORE Act, which allows companies to work remotely for up to 50 percent of the time while keeping tax incentives, played a big role in this shift. As a result, some businesses are opting for smaller office spaces that better support hybrid work setups.

Phl remains a top BPO hub

Despite changes in how office space is used, the Philippines continues to attract new BPO companies. In 2024, companies like X (formerly Twitter) Corporation and Gear, Inc. secured office spaces, with X taking 2,400 sqm. and Gear securing 1,900 sqm. The Philippines remains an attractive destination for global companies due to its skilled workforce, cost advantages and strong outsourcing infrastructure.

The outlook for the IT-BPM sector and the office space market in the Philippines remains positive. As the sector continues to grow, both in Metro Manila and provincial areas, it will remain a key player in the local real estate market. In the coming years, the industry is expected to keep evolving, with companies investing in new technologies and adapting to hybrid work models.

The Philippines will likely continue to lead in the global outsourcing market, supported by a skilled workforce, strong infrastructure, and government incentives. For real estate players, this evolving demand presents opportunities to cater to the changing needs of the IT-BPM sector.

In summary, the IT-BPM industry’s growth and shifting office space requirements in 2024 highlight its resilience and adaptability. The future of the office space market in the Philippines looks bright, with continued expansion and evolution driven by the IT-BPM sector.