Colliers Insight
DESPITE the controversies that emerged late in 2025, Metro Manila’s office market entered 2026 on relatively steady footing. Leasing decisions continued, landlords largely held their ground, and the sector showed that resilience now means recalibrating amid uncertainty rather than simply recovering from it. For Colliers, the months ahead are less a time for hesitation than a window for occupiers and landlords to act with intent.
RESILIENCE DESPITE LATE-2025 CHALLENGES
The first quarter of 2026 showed that Metro Manila’s office market is on firmer ground than many expected after the disruptions and concerns that surfaced late last year, including the flood control controversy. Traditional firms continued to support demand, followed by third-party outsourcing firms and shared services. Colliers recorded 193,000 square meters of office transactions in Metro Manila during the quarter, up 12% year over year, indicating that occupiers are still taking up office space. This has kept vacancy broadly stable and rents largely unchanged across major submarkets.
The countryside, however, posted a more subdued performance, with demand falling 32% year over year and Iloilo overtaking Cebu, as the latter continues to face limited available office space in its information technology (IT) and business parks. In our view, provincial office demand may become more geographically diverse in the months ahead, as occupiers explore alternative locations such as Pampanga, Bacolod, and Iloilo, where a substantial amount of space remains available.
‘CONTROLLED’ SUPPLY LEVELS TO CUSHION CRISIS IMPACT
While no new office completions were recorded in Q1 2026, Colliers expects around 505,000 square meters of new supply to be delivered by year-end. Beyond 2026, new supply is projected to remain at more controlled levels, averaging about 308,000 square meters annually over the next four years. This more measured pipeline should help limit the impact of softer office demand in the short to medium term as the ongoing global crisis persists. In that scenario, Colliers projects overall market vacancy could rise by 2% to 3%, but controlled supply is still likely to cushion the increase despite near-term demand headwinds.
PHILIPPINE ECONOMIC ZONE AUTHORITY CONSTRAINTS MAKE EARLY PLANNING MORE IMPORTANT
One area that warrants closer attention is the shrinking availability of Philippine Economic Zone Authority (PEZA)-accredited office space in key business districts. As of Q1 2026, available PEZA-accredited space across Makati central business district (CBD), Fort Bonifacio, and Ortigas Center had fallen to 478,000 square meters, narrowing options for information technology and business process management (IT-BPM) firms that require large floor plates and prefer prime locations. Metro Manila remains the entry point for many occupiers looking to establish operations in the Philippines. With limited PEZA-accredited space available, some firms may find it more difficult to execute their market entry or expansion plans, especially if they require incentives to support their initial investment.
For occupiers, this reinforces the importance of planning early, whether through site selection, pre-leasing, or built-to-suit strategies, before the remaining options become even more constrained.
WHY THIS IS THE TIME TO ACT
The Philippine office market showed resilience in Q1, but uncertainty remains as the conflict in the Middle East continues. In this environment, waiting out the crisis is a risk in itself. For occupiers, acting early may mean securing PEZA-accredited space, locking in large floor plates, or starting lease negotiations while market conditions still offer some room to negotiate. Firms with expiring leases should also reassess whether renewal, consolidation, relocation, or flexible workspace solutions best align with their cost and workforce strategy over the next 12 to 24 months.
For landlords, the imperative is equally clear: refurbishing aging assets, modernizing building systems, reinstating previously occupied floors, and sharpening leasing packages can make properties more competitive as occupiers become more selective. Those who act now will be better positioned to capture the upside when market conditions improve.
The article was originally published in Business World and written by Kevin Jara and Kath Taburada.
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