The demand for Philippine office spaces will continue to grow in the next three years even if US-owned business process outsourcing (BPO) firms will leave or avoid the country because of President Donald Trump’s protectionist policies, according to Anthony Couse, Asia Pacific chief executive officer for property consultancy firm Jones Lang Lasalle (JLL).
Couse based his projection on the country’s ability to weather global headwinds.
Concerns are circulating that the offices segment in the Asia Pacific region will slow down amid Trump’s proposal to slap additional taxes on American firms that will invest and operate outside the United States.
But Couse said the Philippines, being the second fastest growing economy next to India, will continue to experience strong demand for its office inventory and “remain an attractive location” given its average 6.7 percent economic growth low attrition and labor costs, among others.
“Foreign investors that are already here in the Philippines or in Asia Pacific are already comfortable. They are not concerned about [Trump’s protectionist policies],” he said.
“Demand side for office remains very strong. Particularly here in Manila, the BPO industry continues to drive the office market,” he added.
But he advised real estate investors to “diversify risks” and look at other unconventional asset classes such as schools, hospitals, airports, and other infrastructure projects especially since the country is ramping up its infrastructure spending.
“You cannot rely on one sector. We maintain the BPO industry will continue to grow but we need to diversify,” Couse said.
With a pool of a young workforce and consumer spending driving the economy, Couse is positive that the Philippines will sustain its attractiveness to investors and businesses.
The Philippine government is committed to accelerate infrastructure spending at 5.4 percent of the gross domestic product (GDP) for 2017 and further raise it to 7.2 percent by 2022. Such accelerated spending will translate to roads, bridges, public transport facilities, and airports, among others, that will boost economic activities.