Metro Manila office market proves more resilient than expected in Q2

Office vacancy held at 19% as BPO demand kept companies leasing space despite global uncertainty.

Metro Manila’s office market is proving more resilient than many expected, with companies continuing to lease space, rents inching higher, and the BPO industry leading demand despite global uncertainty and lingering economic pressures.

Lobien Realty Group (LRG) said office vacancy in Metro Manila held at 19% in the second quarter of 2026, while average asking rents rose to around ₱1,000 per square meter, suggesting businesses are still expanding and upgrading their workplaces instead of putting plans on hold.

“Real estate as a sector grew 6.8 percent year on year in the first quarter despite the headwinds. That’s one of the clearest signs that demand fundamentals remain intact,” said LRG Chief Executive Officer Sheila Lobien.

The biggest driver continues to be the IT-BPM sector, which now accounts for 52% of all office space leased, up from 45% just two quarters earlier. LRG expects the industry to create 70,000 new jobs this year, generating demand for at least 300,000 square meters of additional office space.

Developers are also taking a more disciplined approach. Instead of adding office towers at the pace seen before the pandemic, only about 700,000 square meters of new office space is expected to enter the market through 2027, well below the roughly one million square meters delivered annually from 2017 to 2019. The slower rollout could help landlords fill existing vacancies while keeping rents stable.

Bonifacio Global City remains the preferred location for many BPO firms, IT companies, and corporate headquarters, while Makati continues to hold its place as the country’s premier business district. Companies looking to manage costs are also expanding into Quezon City, Alabang, and other emerging office hubs.

Lobien also pushed back against fears that artificial intelligence will replace the BPO industry. She said AI is more likely to take over repetitive tasks while creating demand for workers who can handle more complex, higher-value work, making upskilling an increasingly important investment for both companies and employees.

Taken together, the figures point to a market that is adjusting rather than slowing down. Businesses are still hiring, developers are building more carefully, and office demand continues to find support from one of the country’s biggest job-generating industries.

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