BPO firms find difficulties in entering Mindanao

A number of business process outsourcing (BPO) firms could not set up shop in Mindanao because of martial law, a top official of Leechiu Property Consultants said.

Company CEO David Leechiu said last week that a number of companies could not operate in Davao and Cagayan de Oro “even if they want to.”

“I guess the only problem in Mindanao right now is the issue of martial law and security, or the perception of security,” he said.

“There’s a lot of office space coming into the market in Davao [and Cagayan de Oro], but the tenants cannot go because of the martial law,” he added.

It is unclear if only upcoming companies experience difficulties in doing business in Mindanao under martial law. He said the company’s biggest client in Davao even expanded recently.

Mindanao was placed under martial law until the end of this year, after Islamic State (IS)-allied militants rampaged through Marawi City more than a year ago.

While authorities aim to disassociate the martial law in Southern Philippines from that under the Marcos dictatorship in the 1970s, Filipinos are still haunted by the horrors under the late dictator, whose family is close to the Duterte administration.

“I hope the government will lift the martial law, particularly in Davao and Cagayan de Oro, so that the BPO industry can go there,” he said.

The BPO industry is one of the main drivers of the office property market in the country, despite the challenges that it has been experiencing lately, including those coming from the tax reform program of the government.

While Leechiu previously reported that 1.4 million square meters in total office transactions were recorded as of September, it remains to be seen how Mindanao could get a bigger slice of that pie.