Outsourcing could see boost from Trump tariffs, says Colliers

THE Philippines' office market could see a surge in demand as companies from the United States seek cost-cutting measures in response to a trade war launched by US President Donald Trump, a real estate consultancy said.

In a report on Tuesday, Colliers Philippines said that outsourcing would be a viable solution for US firms looking to mitigate rising production costs under Trump's policies.

"These cost-cutting measures thus present an opportunity for the Philippines, a leading global outsourcing destination, to absorb new demand for BPO services," Colliers said.

"Unless these companies are willing to pass these additional costs on to American consumers, they need to find ways for their products to remain viable," it added.

One option is to outsource non-core and support functions to countries such as the Philippines, where labor is cheaper but laborers have the required expertise.

Since assuming office in January 2025, Trump has reintroduced protectionist trade measures, including a 25-percent tariff on imports from Canada and Mexico, and a 10-percent tariff on Chinese goods.

Colliers said that these tariffs are expected to drive up production costs for American firms, particularly those dependent on imports.

It added that the Philippines can take advantage of these developments as it has been a global leader in the business process outsourcing (BPO) sector, offering services in the areas of customer support, information technology, finance and human resources.

It also said that the country's time zone advantage would allow for 24/7 business continuity as Philippine outsourcing firms operate during US business off-hours.

With Metro Manila's office vacancy rate at 19.8 percent — partly due to the exit of the offshore gaming operators — BPO firms are well-positioned to take advantage of more tenant-friendly lease terms.

A US move to discourage outsourcing, however, could upend this outlook.

"A particular concern and it would be good to monitor this, is the side of protectionism that aims to protect jobs in America, which could cause outsourcing to slow down," Colliers said.

It urged the Philippine government to enhance tax incentives and streamline regulations, particularly after the signing into law of the Create More Act and its implementing rules and regulations.