THE PHILIPPINE outsourcing sector is shifting away from traditional large-scale business process outsourcing hubs toward smaller and more specialized global capability centers (GCCs), according to analysts.
Global capability centers accounted for 39% of information technology and business process management (IT-BPM) office demand, while the remaining 61% came from third-party outsourcing companies, Leechiu Property Consultants (LPC) said.
In its first-quarter “Navigating Uncertain Times” market report, LPC said gross office demand reached 232,000 square meters (sq.m.), with IT-BPM firms accounting for 79,000 sq.m. of office take-up.
Office net demand rose to 133,000 sq.m., supported by the absorption of spaces vacated following the exit of Philippine Offshore Gaming Operators.
“The broader office numbers support the read that the market is on firmer ground,” LPC said.
Of the total office take-up by IT-BPM firms, expansion projects accounted for 51,000 sq.m., while consolidation projects reached 16,000 sq.m. Relocation and expansion projects, as well as new site developments, each contributed 6,000 sq.m.
LPC said the office leasing pipeline is “split almost evenly” between IT-BPM tenants and traditional occupiers at 114,000 sq.m. and 113,000 sq.m., respectively.
The consultancy said the growing share of GCCs reflects how multinational companies are increasingly establishing their own operations in the Philippines instead of relying solely on third-party outsourcing providers.
LPC said outsourcing and offshoring to the Philippines remain viable strategies for US companies seeking operational efficiency, while more firms are choosing to build in-house operations through GCCs.
Meanwhile, KMC Solutions said the country is “moving away from massive cost-saving hubs toward specialized, high-impact nano and micro-GCCs.”
The company said traditional large-scale outsourcing models are being reshaped by artificial intelligence integration and rising demand for enterprise-grade technical capabilities instead of backend support functions.
The shift is projected to increase the Philippine GCC market value to $55.59 billion by 2030, representing a compound annual growth rate of 9%. The market was valued at about $35.12 billion in 2025.
LPC said the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act could further support the shift by streamlining corporate compliance and tax incentives.
“While GCCs sign the same lease terms as other IT-BPM occupiers, including call centers, the way they occupy space tends to look a little different. They invest more in their fit-outs and hire for higher-value, more specialized roles. They are not chasing the lowest cost per seat. They are building long-term capability hubs,” LPC said.
The consultancy added that risks remain, including the ongoing energy crisis and the US-Middle East conflict, which it said companies are monitoring closely.
The article was originally published in Business World and written by Juliana Chloe A. Gonzales.
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