Real estate services provider Colliers International Philippines asked the government to expedite the approval of Philippine Economic Zone Authority applications to sustain the growth of the business process outsourcing sector.
Colliers said in a statement the Duterte administration approved only 36 out of the 78 Peza IT center and park applications so far. This represented an approval rate of 46 percent.
Data showed that only four Peza applications were approved in 2016, while 26 more obtained clearances in 2017. Only six applications received Peza status in the first nine months of 2018.
Colliers said of the 36 buildings and IT parks granted Peza status, 21 are in Metro Manila while the remaining 15 are in Cebu, Bataan, Bulacan and Laguna.
“We recorded a stronger office space absorption from BPO companies from January to September 2018. The granting of Peza accreditation to more office buildings and IT parks should support the Philippine BPO sector’s growth trajectory,” said Colliers International Philippines director for office services Dom Fredrick Andaya.
Some 640,000 square meters of office space have yet to be granted Peza approval in Metro Manila. This represents nearly 80 percent of Colliers’ projected annual net take-up in 2019 and presents tremendous opportunities for both developers and occupiers.
“We also encourage developers with pending applications to start targeting traditional and non-BPO firms that have been expanding across Metro Manila. The country’s economic managers are expecting a GDP growth of 6 percent to 6.5 percent this year and 7 percent to 8 percent from 2019 to 2022 and a strong macroeconomic backdrop should support the expansion of these businesses. This should eventually compel firms to occupy larger office space,” said Andaya.
Colliers said it was expecting 1 million sqm of new office supply in Metro Manila to enter the market in the next 12 months.
About 41 percent of the space up for completion in 2019 were granted Peza accreditation.
Colliers said hitting the estimated net take-up next year would hinge on the availability of Peza-proclaimed buildings as outsourcing firms almost exclusively locate in these towers.
Colliers recommended a more accelerated approval of Peza applications in the provinces to disperse BPO activities outside of Metro Manila and bolster employment opportunities in the countryside.
Among the provincial sites with pending Peza applications are Bataan, Benguet, Cavite, Cebu, Davao del Sur, Iloilo, Laguna and Negros Occidental.