As of the second quarter, the capital region has 1.83 million sqm of office supply. Of this, 54 percent is vacant, while the rest remains unleased. The Bay Area experienced the sharpest increase in vacancies, rising from 33.5 to 38.5 percent. Developers have reduced new launches to avoid oversupplying the market. 

POGO ban  

The sharp increase in office vacancies follows the Philippine government’s enforcement of a nationwide ban on POGOs. President Ferdinand Marcos Jr. ordered a full-scale crackdown in 2024. 

Under Executive Order No. 74, the Philippine Anti-Organized Crime Commission (PAOCC), the Philippine National Police (PNP), and the Criminal Investigation and Detection Group (CIDG) were directed to conduct operations against non-compliant POGOs. Local government units were instructed to step up monitoring, while the Department of the Interior and Local Government (DILG) is coordinating community-level intelligence.

According to data from the Presidential Communications Office, more than 53,000 POGO employment licences have been revoked. The closure of POGO hubs has led to the seizure of related properties. While some proposals suggest converting these facilities into schools, government offices, or shelters, legal gaps surrounding the repurposing of assets remain unresolved. 

IT-BPM sector expected to fill the gap by 2028 

Despite the short-term rise in vacancies, CBRE expects conditions to improve by 2028. The projected recovery is tied to growth in the IT-business process management (IT-BPM) sector. Two growth scenarios were outlined: a high-growth path based on a 10–15 percent annual increase in full-time employment, and a more conservative outlook, referencing historical trends at a 2.4 percent growth rate over three years. 

The banking, finance, and healthcare industries are emerging as key demand drivers for the office sector, helping offset losses from the closure of POGOs. 

Developers expand beyond Metro Manila amid weak demand

With high vacancy levels and cautious tenant activity in Metro Manila, developers are shifting focus toward emerging provincial markets. Iloilo, Bacolod, Dumaguete, and Tagbilaran are now targeted for BPO expansion, with township developments planned in these areas. 

CBRE reported that provincial demand reached 48,600 sqm in the first half of 2025. Cebu accounted for 31,550 sqm, followed by Iloilo with 14,200 sqm and Pampanga with 3,100 sqm. 

In the Visayas, Megaworld led all developers with 18,500 sqm in leased space, followed by Ayala Land (10,700 sqm), King Properties (4,300 sqm), Filinvest Land (3,600 sqm), and JEG Realty (3,000 sqm). Major deals include Marubeni Real Estate acquiring 5,800 sqm in Iloilo and Wipro occupying 4,300 sqm in Cebu. 

Coworking spaces gain traction post-pandemic 

Coworking operators also continued to expand during the first half of the year. KMC Solutions leads in available seats, with Robinsons’ Work.able and Ayala’s Clock-in brands close behind. The demand for managed facilities has grown steadily as companies adopt hybrid return-to-office strategies. 

Iloilo and Cebu saw the largest expansion in shared office offerings. Wipro, Avant Solutions, and other firms secured large coworking and flexible space leases across the two cities.