Ecozone moratorium in NCR seen curbing locator flexibility

By Juliana Chloe A. Gonzales

THE MORATORIUM on approving new economic zones in Metro Manila is restricting the flexibility of IT and business process management (IT-BPM) companies in selecting office locations, Savills Philippines said.

Savills Philippines Chief Operating Officer Cha Carbonell told BusinessWorld via Viber on Thursday that while the Metro Manila office market “has a headline vacancy of around 20%… once you apply the filters that creditworthy multinational corporations (MNC) and business process outsourcing (BPO) occupiers require — PEZA accreditation, green certification, business continuity plan (BCP)-grade specifications — that figure drops sharply.”

Administrative Order (AO) No. 2018, signed by former President Rodrigo R. Duterte, instructed the Philippine Economic Zone Authority (PEZA) to no longer accept, process, or evaluate applications for new ecozones in Metro Manila to channel investment to areas outside the capital.

Ms. Carbonnell said the policy may no longer be a good fit given the current demand for high-quality, PEZA-compliant spaces.

The core business districts have only 478,000 square meters (sq.m.) of such space available combined, including 119,000 sq.m. in the Ortigas central business district (CBD), 160,000 sq.m. in the Makati CBD, and 199,000 sq.m. in Bonifacio Global City (BGC).

When asked if major locators are migrating to secondary CBDs, or choosing to forgo PEZA incentives to remain in primary districts, Ms. Carbonell said the large occupiers with PEZA registered status, are almost universally not interested in giving up the incentives.

“What we are seeing instead is a more structured migration rationale toward secondary districts, driven by… employee accessibility, cost arbitrage (secondary district rents run roughly 20-40% below BGC and Makati), and BCP considerations where companies want to split requirements across multiple hubs,” Ms. Carbonell said.

The supply gap is forecast to worsen in the coming years, with only 711,000 sq.m. of upcoming office stock being PEZA-certified, according to the Colliers first quarter 2026 Property Market Briefing.

Colliers called AO 18 a “blunt policy tool” given that Metro Manila is the primary driver of the office sector, accounting for around 70% of IT-BPM transactions in the first quarter.

“Non-PEZA, non-green buildings are already carrying a vacancy rate of approximately 30%, and the trajectory is upward. The structural demand drivers are firmly against this segment: the most creditworthy occupiers will not enter them, and even government office take-up… is unlikely to absorb the volume at risk,” Ms. Carbonell said when asked about the occupancy outlook for non-PEZA office buildings.