• By quade
• 31 July 2024

New BPO Spaces To Be Picked Up From Former POGOs

As the ban on Philippine offshore gaming operations (POGO) is expected to come into effect, this will leave countless offices and facilities for use. Among the biggest beneficiaries of these developments are Business Processing Operators as they will convert these areas into BPO spaces.

With these new offices, the presence of BPOs in the Philippines is only expected to grow. This will provide new opportunities for existing operators to expand their operations and new operators to make their mark. 

Effects of the POGO Exodus on BPO Spaces

“(Developers) need to replace those tenants that they have now. They can move back to what they’re looking at (before). I expect them to focus more on BPOs  because those are the more reliable sources. For the longest time, (BPOs) have been the ones driving the market, and likely they’re the ones (which) will carry the market in the next couple of years.”

-Janlo delos Reyes, JLL head of research.

Despite this development, Delos Reyes insists that the departure of POGOS will not be a major issue in the office market industry.  He explains that the most affected areas are in Paranaque City and Pasay City as most POGOs are located here.

“The volume of POGOs is not as significant as before. It was during the pandemic… (when)  some of them have exited the market.”

-Janlo delos Reyes, JLL head of research.

However, he does admit that many rent spaces in the area are expected to go down. They may go down to below P1,000 per square meter due to the higher vacancy rates. This is significantly lower than the current rates which are well over P1,000.

While this is bad news for landlords, there is plenty of potential in BPOs. With prices down, it provides the opportunity for expansion in the sector. Now different groups can have their pick of the best spots without having to go to more expensive places like BGC or Makati.

Shifting Hubs for BPO Spaces

Most of these transactions take place in traditional BPO spaces like Makati and Taguig, with Taguig posting an 18.5 percent increase to 75,101 sq.m., and Makati up 32.6 percent at 68,270 sq.m respectively.

Of these, BPO spaces contributed to about 39.9% of all the leases they rented out for the first half, with corporate and conventional tenants taking up another 34.9%.

“If you are a BPO tenant, or a corporate, you have a lot of options in the market that you might go to. Makati, if that’s your preferred destination or Bonifacio Global City. If you want to be decentralized, you might look at Quezon City or the Bay Area.”

-Janlo delos Reyes, JLL head of research.

However, the availability of the former POGO facilities offers an opportunity for new BPO spaces to spring up in the south. 

How BPOs Can Benefit From New BPO Spaces?

The question remains whether or not BPOs can benefit from this development. That will depend on how well these outsourcing providers take advantage of the opportunity provided to them. With all this new space, BPOs of all sizes stand to benefit.

Smaller ones have a chance to find office space at an affordable price which lowers overhead and allows them to provide competitive pricing to clients. Meanwhile, it gives more wiggle room for larger BPOs to expand quickly and easily. 

But for the Philippine BPO Industry as a whole, it is an opportunity for the industry as a whole to expand. With the departure of POGOs, it creates a power vacuum for them to fill. Now there are all sorts of talent and facilities that BPOs can easily access at a fair price.