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Real estate industry bullish, driven by BPO demand for office space
By: Administrator | 1/7/2009 1:47:53 AM
Try to visit Makati, Ortigas Center and other locations where a
number of outsourcing firms are located and chances are you may
find the following: convenience stores and restaurants are open for
24 hours, public utility vehicles are plying their routes even
during the ungodly hours and construction of buildings is
The business process outsourcing (BPO) industry, which is considered as one of the sunshine industries in the country, has created ripple effects on the economy and on businesses.
Apart from providing 300,000 direct jobs for Filipinos and generating US$4.9 billion revenues in 2007, it has improved the local economy by creating a new segment of the population, composed of BPO workers in their 20s, with high disposable income, much more than their counterparts in other industries.
Restaurants, coffee shops, convenience stores, and even the public transport system, are now serving BPO workers 24/7 since the nature of their jobs requires them to deal with customers living in different time zones. And this phenomenon has generated additional employment opportunities for Filipinos leaving near the BPO sites.
Commissioner Monchito Ibrahim, chair of the Commission on Information Technology, said in a previous interview with abs-cbnNews.com/Newsbreak that for every job generated by the BPO industry, there are three indirect jobs created in the indirect services like retail and the transport sector.
One of the sectors that has benefited so much from this growth in outsourcing is the real estate sector, mainly because of the huge demand for office space by the BPO firms. Unlike other businesses that need only two or three units for their operations, BPO companies rent several floors or even an entire building to house their facilities and operations.
The demand for office space by the BPO industry plus the economic slowdown in the United States-where major clients of outsourcing firms are-make experts in the real estate industry bullish over the industry's growth in the coming months and their optimism is not entirely without a basis.
Benefiting from economic slowdown
BPO industry experts have been optimistic that the recession in the United States and other major economies would mean more and more companies trying to cut down costs by outsourcing more functions to countries with cheaper labor, like India and the Philippines.
"It's still cheaper to outsource than doing it there in the United States," said Jojo Uligan, executive director of the Contact Center Association of the Philippines (CCAP) in an interview with abs-cbnNews.com/Newsbreak. Call centers comprise 74 percent of the US$4.9 billion revenues of the industry in 2007.
Contact KMC MAG Group for Real estate industry bullish, driven by BPO demand for office space