Demand for provincial BPO space seen rising in 6 yrs


The rapid growth of the Business Process Outsourcing(BPO) industry will increase the demand for office space in the provinces by around 1.95 million square meters in the next six years, a property consultancy firm said.

In a press briefing on Wednesday, Leechiu Property Consultants(LPC) chief executive officer David Leechiu noted that the BPO story is not only about Metro Manila anymore, as BPO activities are also coming from the provinces.

Leechiu cited data from the IT and Business Process Association of the Philippines(IBPAP), which noted 30 percent of the 1.3 million full time employees(FTEs) BPO companies hire are in the provinces. This would translate to around 390,000 FTEs.

Noting that the number of jobs is seen to double to 2.6 million in the next six years, Leechiu said that this would also double the demand for BPO spaces in the provinces.

The currently available BPO office space in the provinces amounts to 1.31 million square meters, 36 percent of which or 476,000 square meters are in Cebu.

“The increase from 390,000 to 780,000 FTEs by 2022 translates to 1.95 million square meters of office space demand,” LPC said.

With the increased demand for BPO office space in the provinces, Leechiu named some of the next wave of cities for BPO companies outside Metro Manila.

Among these cities which have not yet been tapped by any BPO locators are: Tuguegarao in Cagayan, Dagupan in Pangasinan, Malolos and Meycauayan in Bulacan, Batangas City in Batangas, Kalibo in Aklan, Tacloban in Leyte and Tagbiliran in Bohol.

LPC recommends the aforementioned markets to BPO companies because of their healthy labor pool, local government support, fiber optic connectivity, accessibility and strong tourism potentials.

“The Tacloban economy is better today than it ever was after Yolanda. So we encourage the BPO industry to revisit Tacloban,” Leechiu said.

He explained that BPO companies have not tapped the locations cited because of the lack of awareness about these areas.

“Sometimes many clients find it difficult to go to [hese places]but recently so many flights have been made available, so many new roads so what they thought was a two-hour or three-hour journey siguro kalahati na lang ‘yun ngayon,” Leechiu said.

Asked when the BPOs will take notice of these next -wave cities, Leechiu said, “Within 12 months because we’re actually helping these companies go to these locations.”

The firm also named four provinces that BPO companies have tapped, but have only felt the presence of three or more IT-BPO firms.

Some of these locations are in Taytay, Binangonan, Antipolo and Cainta in Rizal; Calamba, Binan and Sta. Rosa in Laguna; Imus, Dasmarinas, Rosario and Bacoor in Cavite; and Cagayan de Oro in Misamis Oriental. .
“Of all these areas, I am most excited for Rizal province, which is really part of Greater Manila. Because [of]the entire Rizal province, the population of Angono, Taytay, Binangonan and Cainta is roughly two to three million people. It’s a true middle class community. They have no choice but to go to Metro Manila to work,” Leechiu said.

Meanwhile, Leechiu noted that another factor that hinders the development of BPO buildings in untapped areas, especially in the provinces is the size requirement the Philippine Economic Zone Authority (PEZA) imposes before it accredits a BPO building. This is the reason why property developers are not attracted to build office spaces in such locations.

“We’re encouraging PEZA to reduce the size requirement for BPO space in Metro Manila and in the provinces,” Leechiu added.

He explained that PEZA used to require developers to build 5,000 sqm of office space before they can be granted PEZA-accreditation, but this has been increased to 10,000 square meters for Metro Manila alone. For the provinces, it has been raised from 2,000 square meters to 5,000 square meters.

Leechiu added it will be better if PEZA reverted back to the old criteria, as it would spur development both in the provinces and in untapped areas of Metro Manila.

“By bringing back the provincial requirement to the old 2,000 sqm, you actually spur more development in the provinces because there are so many provinces that can house 400- seater call centers or 300-seater call centers. But they cannot house 1000-seater call centers because the labor force cannot support it,” Leechiu said.


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