BPO industry on track to breach $21-B revenues

MANILA, Philippines – The country’s business process outsourcing (BPO) industry is expected to generate a little over $21 billion in revenues this year, higher than the $18.9 billion raised in 2014.

For 2016, the sector’s revenues are seen to reach $25 billion.

Revenues from the BPO industry have been growing in double digits which are seen to surpass the dollar contributions of overseas Filipinos in two to three years.

Last year, personal remittances from overseas Filipinos reached $26.9 billion, maintaining the average single digit growth rate.

According to Pinnacle Real Estate Consulting Services Inc., the BPO sector is expected to end the year with a total of 1.2 million employees. Next year, industry is targeted to grow to 1.3 million jobs.

Apart from the BPO companies’ direct need for real estate, investors can also look to benefit via renting out to traditional offices and commercial and retail establishments intending to take advantage of the opportunities provided by the market composed of BPO employees.

Pinnacle Research also noted a brisk take-up of approximately 200,000 square meters of office space in the past three months, most of which were pre-leased.

The overall vacancy rate of major business districts in Metro Manila is still below five percent even with the new buildings coming online.

Makati office spaces still command the highest rents, but with the influx of modern Bonifacio Global City (BGC) buildings, there is a slight downward pressure on Makati rents.

While rents in Makati generally held up where Premium Grade A buildings have a weighted average of P1,280 per sqm per month, Grade A buildings have a weighted average of P865 per sqm per month, and for Grade B and C buildings, the weighted average is P675 per sqm per month.

Some Grade B and C buildings, and even Grade A buildings are slightly lowering their asking rates due to competition from newer and better stocks in BGC, and other central business districts (CBDs).

The weighted average rent in BGC of P870 per sqm per month is slightly higher when compared to Makati Grade A buildings.

The average rent of Grade A office buildings in Ortigas, Alabang, Quezon City, and Bay Area business districts is estimated at P650 per sqm per month. Meanwhile, in Cebu and Davao, average Grade A office rent is P450 per sqm per month.

The “Next 10 Cities” identified to prosper in the coming years include Baguio City, Davao City, Dumaguete City, Iloilo City, Lipa City, Metro Bulacan (Baliuag, Calumpit, Malolos City, Marilao and Meycauayan City), Metro Cavite (Bacoor City, Dasmariñas City and Imus City), Metro Laguna (Calamba City, Los Baños and Sta. Rosa City), Metro Naga (Naga City and Pili), and Metro Rizal (Antipolo City, Cainta and Taytay).