The Philippines is emerging as an attractive destination for international real estate investors and occupiers, buoyed by its positive growth outlook, according to real estate services firm Cushman & Wakefield.
“Southeast Asia’s comparatively strong GDP (gross domestic product) forecast has made it a bright spot in the global economy,” Cushman & Wakefield’s Head of Global Occupier Services for Asia-Pacific Cameron Ahrens said in a statement last week.
The firm added that the growing acceptance of new working styles combined with the cost constraints of a higher interest rate environment bodes well for lower-cost and emerging markets in the region.
“Manila also has a booming office sector thanks to its significant proportion of shared service centers, or business process outsourcing offices,” Mr. Ahrens said.
Moody’s Analytics expects the Philippine economy to expand by 5.8% this year, driven by robust demand for electronics that could catalyze export growth across the Asia-Pacific region. The country is also projected to be the third-fastest-growing economy in the region for the year.
Mr. Ahrens noted that the higher interest rate environment and broader macroeconomic climate meant that global occupiers, including multinational companies, continued to take a cautious approach to costs.
“In the current environment, we are seeing companies take a more considered approach to expenditure, and this extends to expanding headcount. They are being very strategic about where they want to grow their headcount and where they want to grow their business,” he said.
He added that globally, shared service offices and global capability centers are expected to continue seeing growth as multinationals increasingly accept that remote working is both possible and sustainable.
“During and following the pandemic, the Great Resignation and the ensuing War for Talent helped to accelerate the growth of this practice as employers looked to new and often lower-cost markets to fill vacancies and grow their headcount,” he said.
“Manila’s deep, English-speaking talent pool and its established reputation as a business process outsourcing market positions it as a key beneficiary,” he added.
Although the region shows promise, Cushman & Wakefield highlighted lingering downside risks. These include reduced demand from China, a key export market for Southeast Asia; ongoing geopolitical tensions between China and the United States; and persistent albeit gradually improving inflation across the region. — Aubrey Rose A. Inosante
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The article was originally published in Business World.
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