For seven years, the biggest constraint on Metro Manila's office market wasn't demand — it was supply. That just changed. On July 23, President Marcos issued Administrative Order No. 45, reopening the capital to new IT Parks and IT Centers for the first time since the AO 18 moratorium took effect in 2019. For the IT-BPM sector, it lifts a ceiling that had been forcing companies to defer expansion, settle for non-accredited space, or look outside Metro Manila altogether.

The Problem Was Never Demand

The numbers make the point. As of end-2025, the Philippine IT-BPM industry was generating $40 billion in revenue and employing 1.9 million Filipinos, one of the country's largest sources of foreign exchange and formal, middle-income jobs. Appetite for space has never been the issue. What had grown scarce was the specific product these occupiers need: incentivized, PEZA-accredited space in the prime Metro Manila districts.

That scarcity was by design. The AO 18 freeze was meant to steer development into the provinces, and it worked. Clark, Cebu, Iloilo, and Davao all saw growth accelerate as a result. AO No. 45 keeps that engine running. The moratorium on every other type of economic zone stays in place, and the incentives for regional development are untouched. The only thing that changes is the ceiling over Metro Manila itself, the market where talent, infrastructure, and global connectivity still concentrate to serve the highest-value mandates.

Global Capability Centers Are Reshaping Demand

Office take-up in the first half of 2026 reached 488,000 sqm, down 32% year-on-year, but the headline number matters less than what sits underneath it. The composition of demand has shifted. Global Capability Centers, the in-house offshore operations that multinationals in finance, technology, healthcare, and professional services run for themselves, have overtaken traditional outsourcers as the market's primary demand driver.

That shift raises the bar on space. GCCs typically want larger, higher-specification floors in well-located, PEZA-accredited buildings, precisely the product that had become hard to find in Makati, BGC, and Ortigas. As IBPAP has noted, Metro Manila remains the country's single largest concentration of digital talent, business infrastructure, and global delivery operations, which is exactly why restoring supply here matters to anyone weighing where to expand.

It's worth being clear about what the order is and isn't. The reopening applies only to IT parks and IT centers; it doesn't touch the broader regional development strategy or the government's commitment to growing the industry in emerging cities nationwide. AO No. 45 is not a reversal of provincial policy. It's a targeted correction that restores Metro Manila's role without dismantling the regional agenda AO 18 set in motion.

For a company choosing between the Philippines, India, Vietnam, and Malaysia, the availability of incentivized, Grade A space in the capital is a real factor in the decision. Removing that constraint strengthens the country's hand at the exact moment the global GCC build-out is accelerating.

The Pipeline Is Already Moving

Developers haven't waited for the ink to dry. Five projects have already filed PEZA applications under the new order: Triumvirate's One Trium Tower in Muntinlupa, MJ Landtrade's Altaire in Makati, House of Investments and Sojitz Corporation's The Yuchengco Centre, also in Makati, Aseana Holdings' Parqal in Parañaque, and Ayala Land's ARCA South 1 in Taguig. With the PEZA Board still finalizing its implementing guidelines, the accreditation process is being shaped in real time, and the advantage will go to those who move while the queue is still short.

PEZA Director-General Tereso O. Panga called the order a major policy breakthrough, one that strengthens the country's ability to compete for the next wave of IT-BPM and global capability center investment. The need is structural, too: PEZA has flagged that roughly 44% of Metro Manila's available PEZA office space is now considered aging, which makes replenishing and modernizing the pipeline a genuine requirement rather than a nice-to-have. The capital currently hosts 178 IT parks and centers and more than 1,000 registered locators, a base AO No. 45 is now positioned to expand.

What AO No. 45 Means for You

If you're a landlord or developer, the move now is to confirm whether your asset qualifies and to get into the PEZA application process before the queue deepens. First movers into the accreditation pipeline will be best placed to capture occupier interest as mandates return to the market.

If you're an IT-BPM occupier, the order hands back negotiating leverage in districts where your options had effectively vanished. If you'd settled for non-accredited space or shelved a Metro Manila expansion, now is the time to revisit that footprint, while the pipeline is still forming and before the best locations are committed.

If you're an investor, AO No. 45 strengthens the long-term demand case for well-located Metro Manila assets and opens a cleaner path to value-add plays through accreditation. Buildings that couldn't previously reach the IT-BPM tenant pool may now qualify.

A Signal That Goes Beyond Real Estate

None of this is to say the industry is without headwinds. IBPAP has recalibrated its 2028 growth targets to reflect the accelerating role of artificial intelligence, slower enterprise investment cycles, and stiffer competition from emerging outsourcing destinations. But those are industry-wide pressures, not Philippine-specific weaknesses. AO No. 45 does the one thing fully within the country's control: it removes a self-imposed constraint at precisely the moment every competitive edge counts.

There's a bigger signal here, too. For seven years, the Philippines' most important engine of office demand operated inside a tightening supply squeeze. Lifting it reflects a recognition that keeping the country competitive for IT-BPM is a national economic priority, one tied to millions of middle-income jobs, a meaningful share of GDP, and the Philippines' standing as a global services hub. An order that clears the way for that engine to expand in the country's primary business district matters well beyond the property market.

My own view: AO No. 45 will be remembered as a turning point — both in Metro Manila's office story and in the Philippines' pitch to the world's most sophisticated service operations.

Need PEZA-accredited office space in Metro Manila? With new supply finally opening up, our team can help you find the right fit and secure the best terms. Email inquire@leechiu.com.