The Philippine business process outsourcing (BPO) industry is back on track, indicated by the knowledge process outsourcing segment taking up 28 percent of the total office space in Metro Manila in the first quarter of 2018. Property consulting firm Colliers Philippines reported that the take up is a significant increase from only 16 percent in 2017.

The combined take up from BPO and KPO firms in Q1 reached 46 percent, higher than the 23 percent share of online gaming firms. Net office space take up was about 390,000 square meters in the first quarter.

Colliers Philippines senior research manager Dinbo Macaranas said the growing importance of KPOs was aligned with the BPO industry’s shift towards acquiring new skills. KPO firms require more specialized skills such as digital marketing, legal services, research and development, design and animation.

While voice-based BPOs have been the biggest contributor to industry revenues since 2000, KPOs are steadily increasing their contribution. Colliers said strong demand for KPO services is good news amid concerns of potential reduction in fiscal incentives for outsourcing companies.

As the BPO segment moves toward higher value services, Colliers expects a stronger contribution from the KPO sub-segment, with a 6 percent growth in net take up over the next three years due to a more diversified tenant mix.

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