If you have followed the Philippine office market for any length of time, you already know how central the IT-BPM sector has been to its story. For close to two decades, it has anchored demand across Metro Manila and key provincial hubs, filled millions of square meters of office space, and given the country one of its most reliable engines of employment and foreign earnings.

What is less often discussed is just how varied that sector has become. IT-BPM today spans voice and customer support, shared services, back office operations, finance and accounting, and revenue cycle management. Call centers remain the backbone of the industry, accounting for more than half of total BPO employment in the country. But within that broader mix, a quieter shift is gathering pace, and our latest data shows it clearly.

The Philippines is steadily becoming a more attractive destination for US-based companies looking to set up shared services operations of their own, and that shift is starting to show up in the leasing pipeline.

What the 1Q 2026 Numbers Are Telling Us

According to our 1Q 2026 Philippine Property Market Report, the active office leasing pipeline now stands at 227,000 sqm, split almost evenly between IT-BPM occupiers (114,000 sqm) and traditional tenants (113,000 sqm).

Within the IT-BPM segment, the breakdown is what we want to draw attention to:

Third-party outsourcers: 61% of pipeline activity
Global Capability Centers (GCCs): 39% of pipeline activity

A 39% share for GCCs is not a footnote. It is a meaningful structural signal, and it is worth understanding why.

So What Exactly Is a GCC?

A Global Capability Center is the in-house offshore arm of a multinational company. It sits within the broader IT-BPM universe rather than apart from it.

Instead of contracting work out to a third-party provider, the parent company sets up its own office in the Philippines and hires its own employees to handle functions such as finance, IT, analytics, engineering, human resources, and increasingly, research and development.

Third-party outsourcers, by contrast, deliver many of the same in-house services, including shared services, back office, and revenue cycle management, but on behalf of external clients rather than a single parent company.

The two models coexist. They serve different client needs and they bring different things to the office market.

Why GCCs Matter to Landlords and Developers

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.

That kind of tenant changes the conversation a landlord is having.

The lease structure across our pipeline reflects this commitment to staying:

71% are on five-year terms
23% are on three-year terms
6% are committing to seven years or more

These are not tenants hedging their bets. They are planting flags.

A Healthier Market Backdrop

The broader office numbers support the read that the market is on firmer ground.

Gross demand in 1Q 2026 reached 234,000 sqm, with traditional occupiers contributing 143,000 sqm (61%) and IT-BPM firms contributing 79,000 sqm (34%). Net demand jumped 77% year-on-year to 133,000 sqm, lifted in large part by a 62% drop in vacated space as POGO-related exits faded from the system. The market is finally absorbing rather than bleeding.

Geography matters too. Makati City led Metro Manila with 77,900 sqm in 1Q transactions, equivalent to 55% of its full-year 2025 total, with 63% of those deals concentrated along Ayala Avenue. BGC continues to run tight at 8% vacancy, while overall Metro Manila vacancy held at 18%.

For GCCs that prioritize prestige addresses, talent catchment, and quality stock, these are the locations of choice.

The Risk to Watch

The picture is not without risk. The escalating energy crisis tied to the Iran conflict and the closure of the Strait of Hormuz introduces real downside pressure on the broader market. Pipeline visibility is healthy, but conversion is the variable to watch. The demand is there. The question is whether requirements translate into actual transactions amid current uncertainties.

This is something we will continue to monitor closely in the months ahead.

The Next Chapter

Still, the structural story is encouraging. The growing GCC share tells us that multinationals are not just engaging Philippine talent through intermediaries anymore. They are setting up shop directly. They are committing capital, leadership, and time.

Outsourcing and offshoring to the Philippines continues to be a viable business strategy for American companies seeking increased efficiency in their operations, and the rising GCC share within the IT-BPM pipeline shows that more of them are now choosing to capture that efficiency directly, through their own offices and their own teams.

For developers, landlords, and policymakers, the message is clear. The IT-BPM sector that has carried Philippine offices for two decades is evolving into something more layered, more sophisticated, and potentially more resilient. The next chapter of this story will be written by the full breadth of the industry, with GCCs taking an increasingly prominent role alongside the third-party outsourcers that built the foundation.

For tailored advice on navigating today's market, get in touch with our Commercial Leasing team at inquire@leechiu.com.