BPO revenues soon to overtake OFW remittances
MANILA, Philippines – The business process outsourcing (BPO) industry may soon overtake dollar remittances from overseas Filipinos in terms of revenues given the continued strong demand for office space, a real estate market consultancy firm said.
In 2014, the BPO sector registered $18.9 billion in total revenue and is forecast to grow between 15 percent and 18 percent for 2015.
Pinnacle Real Estate Consulting Services Inc. said the industry is expected to further grow this year with revenues projected to hit $25 billion.
According to Pinnacle, revenues from call center firms and outsourcing centers could soon grow faster than inflows from overseas Filipino wokers.
At present, the Philippines remains the top destination for IT-BPO firms given the educated talent pool, excellent infrastructure, cost competitiveness, and adequate government support for the industry.
Pinnacle said the next 10 cities for BPOs are 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).
In terms of BPO space, Pinnacle said there has been a take up of approximately 200,000 sqm of office space in the past three months, most of which were pre-leased.
“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,” Pinnacle said.
Pinnacle noted that some Grade B&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 CBDs.
The weighted average rent in BGC of P870 per sqm per month is comparable to 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.
On the other hand, in Cebu and Davao, average Grade A office rent is P450 per sqm per month.