The Philippine office market continued to show resilience in the third quarter of 2025. Despite global uncertainties and policy transitions, stable demand from key occupiers and easing vacancy rates signaled a market that is regaining balance and building toward sustainable growth.

Steady Recovery in a Shifting Market

The Philippine office market continued to hold steady in the third quarter of 2025, showing resilience amid protectionist trade policies and geopolitical tensions. Year-to-date, office demand reached 966,000 sqm, equivalent to 88% of 2024’s total, reflecting continued tenant confidence even without support from the offshore gaming sector.

Net demand climbed to 319,000 sqm this quarter, or 76% of last year’s total, a clear sign that the market has largely absorbed the impact of POGO exits. Movement remains active, with relocations and expansions driving activity across key business districts.

IT-BPM Leads, Traditional Occupiers Stay Strong

The IT-BPM sector remains the backbone of office demand, accounting for 45% of total take-up so far this year. Expansions from global capability centers and outsourcing firms continue nationwide, reinforcing the Philippines’ position as a preferred location for talent and scalability.

Traditional occupiers have also stayed active, taking up 449,000 sqm year-to-date. Beyond this, government relocations and emerging industries such as Philippine Inland Gaming Operators (PIGOs) have contributed to incremental growth, helping broaden the base of demand.

“The first three quarters of 2025 show that the office market continues to hold its ground—as long as demand remains stable and contractions stay manageable. We’re seeing a more sustained and resilient recovery, driven primarily by the IT-BPM sector and traditional office occupiers.” — Edward Gador, Associate Director for Commercial Leasing at Leechiu Property Consultants

Metro Manila Maintains Its Edge

Metro Manila’s major districts remain the center of activity.

Bonifacio Global City (BGC) led office take-ups at 183,000 sqm, driven by IT-BPM expansions.
Quezon City and Ortigas–Mandaluyong followed with a combined 271,000 sqm, fueled by traditional firms seeking larger, more cost-efficient spaces.
Makati CBD remained stable, supported by tenants pursuing value-driven relocations.

Vacancy across Metro Manila eased to 18% (2.7 million sqm), a significant improvement from pandemic levels. BGC (9%) and Makati (10%) recorded the tightest vacancies and are expected to recover the fastest, given the limited new supply in their pipelines. Meanwhile, Quezon City and Ortigas continue to attract occupiers with competitive rents and new inventory.

Provincial Markets Continue to Gain Ground

Outside the capital, demand remains strong in major provincial hubs.

Cebu accounted for nearly 60% of total provincial demand, with IT Park vacancy down to 6%.
Davao and Iloilo also saw expansions from IT-BPM firms, reinforcing the decentralization of office activity across the Visayas and Mindanao.

These emerging centers are playing an increasingly important role in diversifying the office landscape and providing options for companies seeking alternative, cost-efficient locations.

Rental Rates Begin to Stabilize

After several quarters of adjustment, rental rates are showing early signs of recovery. BGC rents are edging upward amid tight vacancy, while Makati Grade A and B buildings have stabilized. Fringe markets such as Alabang and the Bay Area remain competitively priced, appealing to tenants seeking larger floor plates or more flexible lease terms.

“If the office market continues its steady demand performance—and if contractions stay manageable—we’re on track to reach last year’s demand level. The stability we’re seeing today, even without POGO activity, tells us that this recovery is not just a rebound—it’s a sustained one.” — Erika Manasan, Senior Manager for Commercial Leasing at Leechiu Property Consultants

Outlook: Steady Momentum Through 2026

With the economy stabilizing, the IT-BPM sector expanding, and traditional occupiers remaining active, we expect steady progress to continue through the rest of 2025 and into 2026.

As vacancy rates narrow and rents firm up, prime districts like BGC and Makati are positioned to lead the next growth cycle—supported by improving sentiment, easing interest rates, and a more diversified base of demand.