Nearly four in 10 office spaces in Metro Manila's Bay Area were vacant in the first quarter of 2026, as the departure of Philippine Offshore Gaming Operators (POGOs) continued to weigh on the district's commercial property market.
Savills Philippines reported that Bay Area office vacancy climbed to 39.3% from 33.7% in the previous quarter, with net absorption falling to negative 58,400 square meters. The district had approximately 1.26 million square meters of office space, with average monthly rents near P700 per square meter.
POGO exit leaves surplus office spaces
The nationwide POGO ban, announced in 2024 and implemented through the end of that year, left numerous office buildings with vacant spaces originally designed for gaming operations.
However, the oversupply was not solely caused by the POGO departure. Colliers Philippines also identified traditional companies and outsourcing firms that vacated offices in the Bay Area, Quezon City, and Bonifacio Global City following lease non-renewals.
Many former gaming offices require renovations or major adjustments before they can accommodate banks, business process outsourcing (BPO) companies, and other corporate tenants.
Meanwhile, CBRE Philippines reported that Metro Manila's overall office vacancy reached 19.3% in the third quarter of 2026, as office demand continued to weaken. Managed facility providers accounted for 19% of transactions during the quarter, while the IT-BPM sector's share of annual office demand fell to its lowest level in five years.
Government agencies help absorb vacant spaces
Despite the oversupply, the Bay Area has started attracting new tenants. Colliers reported in October that six government agencies accounted for approximately 85,000 square meters of office space in the district.
The Department of Foreign Affairs accounted for the largest requirement at 36,000 square meters, followed by the National Bureau of Investigation at 23,600 square meters and the Center for International Trade Expositions and Missions at 21,000 square meters.
Savills also reported that Bay Area vacancy eased to 35.3% in the third quarter, suggesting gradual improvement despite continued challenges.
The figures highlight the long-term challenge of filling office buildings vacated by gaming operators, while showing how government and private-sector leasing could support the district's recovery.
