Metro Manila’s office market has been undergoing a major shift after President Ferdinand Marcos Jr. signed Executive Order 74 in July 2024. The order enforces a total shutdown of Philippine Offshore Gaming Operators (POGOs) by the end of the year, leading to a sudden wave of office space vacancies in key areas like the Bay Area, Quezon City and Bonifacio Global City (BGC).

But the exodus isn’t limited to POGOs. Some traditional and outsourcing firms also chose not to renew their leases, contributing to rising vacancies.

As of late 2024, around 33 percent of vacated office space — roughly 260,000 sq.m. — was directly tied to POGOs. Add in the global uncertainty from events like the US elections, and many companies have hit pause on leasing plans. This led to a 57 percentage drop in transaction volume and a negative net office take-up of -45,000 sqm. for the year.

In a move that could help calm broader market pressures, the US recently announced a 90-day pause on new tariffs for Asian countries — excluding China. This may ease some of the economic tension globally, though it won’t immediately change the realities of Metro Manila’s office supply.

With so much space available, tenants now hold more power than ever. It’s a good time for businesses to negotiate better rental terms, request more flexible lease conditions, or even ask for incentives like rent-free months or fit-out support. Companies that are planning to move or expand may find more options in secondary business hubs like Ortigas, where rents are lower and infrastructure has improved.

Landlords, on the other hand, are facing a tougher challenge. Former POGO offices weren’t designed for general office use — they often have dense layouts and outdated systems that don’t suit the needs of modern companies. This makes them harder to lease out unless changes are made. Meanwhile, bare shell spaces — empty units that tenants can design from scratch — are becoming more popular. They give tenants more flexibility, potentially lower rent and faster move-in timelines.

Today, there are about 1.2 million sq.m. of bare shell spaces available across the metro, giving landlords plenty of competition.

To stay competitive, landlords must either refurbish these vacated spaces or return them to bare shell condition. Some tenants, like startups and cost-sensitive outsourcing firms, may prefer updated, move-in-ready offices. Others, like large multinationals, may want a blank slate to customize everything. Either way, offering flexible terms and investing in upgrades could make the difference between a quick lease and a long-term vacancy.

Despite the current slowdown, there are signs of life in the market. Businesses are still expanding and relocating. In fact, by late 2024, expansion-related deals made up nearly half of all activity, with relocations not far behind. Experts predict that demand will recover by the end of 2025, especially as companies regain confidence in the economy.

In short, the POGO ban has changed the office landscape — but it’s also created new opportunities. Landlords willing to adapt have a chance to reposition their properties for future growth. Meanwhile, tenants can take advantage of the current climate to get great deals and find spaces that better match today’s hybrid, employee-focused work models.