by: Sarah Joson
Friday, June 3, 2016 |
Global property consultancy CBRE Philippines recently stated that the robust business process outsourcing (BPO) sector of the Philippines, which has fuelled property development in secondary sites, could be one of the forerunners of the incoming administration’s decentralization plans.
CBRE Philippines noted that Metro Manila is the leading location of development, but their data showed that investments are being made in Laguna, Cavite, and Pampanga in Luzon. For the Visayas region, developments can be seen in Cebu, Bacolod, and Iloilo, and for Mindanao - Davao and Cagayan de Oro.
CBRE Philippines Chairman and founder Rick Santos added that initially, developers had limited access to locations outside Metro Manila, but national developers have been seen entering these secondary sites in more recent years. He said it could create a domino effect as it will encourage local developers to improve the quality of their buildings, which could lead to more investors, and growth and employment all over the Philippines.
Santos said the key factors that continue to propel the BPO sector are the country’s young talent pool, low cost of labor, low rental rate, notable customer service, and high yield rate.
CBRE identified the BPO sector as the Philippine economy’s star performer, and is showing no signs of slowing down at 17% growth annually. In fact, the entire BPO sector accounts for 7.5% of the country’s gross domestic product (GDP).
Moreover, the firm cited a report from consultancy firm Tholons which included seven Philippine locations outside Metro Manila in the top 100 outsourcing destinations - an indication that secondary cities are ready for BPO development.
CBRE also stated that numerous local developers have tapped land banks and targeted BPO-friendly locations outside Metro Manila to guarantee market share. These locations are known to cost less in terms of rental rates, making them a more cost-effective option for BPO locators.