The Philippine office market posted a solid performance in the first quarter of 2025, registering a 7 percent year-on-year increase in demand as the wave of Philippine offshore gaming operators (POGOs) exits continued to ease.
Total office demand reached 355,000 square meters during the first quarter of then year. according to Leechiu Property Consultants. This growth was posted despite the absence of Philippine Offshore Gaming Operators (POGOs) and limited demand from government-related deals.
The IT-Business Process Management (IT-BPM) sector remains the primary driver of activity, particularly Global In-House Centers (GICs) serving the healthcare and financial industries. Their continued expansion highlights the Philippines’ strategic position as a key outsourcing hub.
Traditional offices accounted for 45 percent of demand at 160,000 sqm.
Metro Manila Leads Leasing Momentum
Among Metro Manila’s submarkets, Ortigas/Mandaluyong/San Juan recorded the highest leasing activity at 59,000 sqm, while Bonifacio Global City (BGC) absorbed 51,000 sqm—already 40 percent of its total 2024 demand—in the first quarter alone.
Competitive rental rates in these areas continue to attract occupiers seeking value and accessibility.
Vacancy Rate Stabilizes as POGO Exits Slow
Vacant office space across the country declined from 312,000 sqm to 277,000 sqm as the wave of POGO exits continued to ease. The nationwide vacancy rate held steady at 17 percent, a slight improvement from the previous quarter’s 18 percent.
The 1-percentage-point difference, which represented around 120,000 sqm of space. signals a slow but steady recovery according to Mikko Barranda, director at Leechiu Property Consultants.
Barranda said the contraction in vacancy rate is expected to further improve in the coming quarters as there will be less space to be given up as POGOs after the giving up 200,000 sqm. of office space during the last quarter of 2024.
Positive Outlook for 2025
Leechiu projects a total net take-up of 490,000 sqm by the end of 2025, a 16 percent increase year-on-year. This optimism is underpinned by resilient demand from the IT-BPM sector and a continued slowdown in space contractions.
“The office market in the Philippines continues to show grit in the face of global and local challenges. The IT-BPM sector remains to be a reliable key driver of growth, while traditional office tenants are also increasingly active. With a promising outlook for the rest of the year, we expect resiliency amidst potential headwinds,” said Barranda.