Cebu is expected to maintain its position as the Philippines’ leading property market outside Metro Manila as sustained demand from business process outsourcing (BPO) firms, migration, and infrastructure investment continue to support office and residential developments despite regulatory delays, power supply concerns, and elevated borrowing costs, industry executives said.
The outlook was shared during “Visayas on the Rise: Property Sustains Upside,” a mid-year forum on the state of the Visayas property market, where speakers said Cebu remains the country’s largest office and residential market outside the capital despite growing competition from emerging regional cities.
Joey Roi Bondoc, research director at Colliers Philippines, said Iloilo recorded more office transactions than Cebu in the first quarter of 2026 largely because it had more available BPO-grade office space, adding that the difference reflected supply rather than weaker demand in Cebu.
“BPO occupiers require large floor plates in master-planned developments with good transport links and access to commercial establishments,” Bondoc said. Cebu’s tighter office supply has limited the number of large leasing transactions that can be accommodated despite healthy demand, he added.
Bondoc said Cebu continues to outperform other provincial markets in office leasing and residential demand and is expected to retain its leadership as new projects enter the market.
He also downplayed concerns that artificial intelligence would significantly reduce office demand, saying many outsourcing companies are using AI to enhance productivity rather than replace workers.
Companies providing higher-value services such as finance, accounting, legal support, software engineering and animation continue to expand in Cebu and typically commit to long-term office leases, he said.
Many are also redesigning workplaces to encourage collaboration by incorporating amenities and flexible workspaces as more employees return to the office.
On the residential front, DMCI Homes Cebu Business Unit Head Riza Siasar-Ballesteros said developers are increasingly focusing on high-rise projects as Metro Cebu’s limited supply of developable land makes vertical housing the most practical option for buyers seeking homes near workplaces, schools and commercial centers.
“We saw that Cebu has consistently demonstrated strong economic fundamentals and has slowly transformed into a hub and gateway to the Visayas,” Siasar-Ballesteros said. “As long as the government remains strong in providing jobs, infrastructure investments, and support to the business sector, we believe the market will absorb the supply.”
She said migration from neighboring provinces, including Bohol, Leyte, Negros Oriental and Western Visayas, continues to support housing demand as Cebu strengthens its role as the Visayas’ economic gateway.
Continued government investment in infrastructure and job creation should enable the market to absorb additional residential supply, she added.
The executives said several policy and infrastructure issues remain key risks to the sector’s growth.
Bondoc said delays in the issuance of licenses to sell (LTS) restrict the supply of new housing projects and reduce choices for buyers, potentially putting upward pressure on prices.
He also warned that unresolved power supply issues could affect investor confidence and underscored the need for reliable electricity and other utilities to support new residential and commercial developments.
He also called for the passage of the proposed National Land Use Act, saying clearer rules governing land conversion would provide greater certainty for developers and investors while helping balance residential, industrial and agricultural land use.
Developers have also adapted to slower residential loan growth and higher mortgage rates by offering more flexible payment schemes, including lease-to-own arrangements that lower upfront costs for buyers and help reduce unsold condominium inventory, Bondoc said.
Looking ahead, Bondoc said the Philippine property market is undergoing a “shift to suburbia,” with residential demand increasingly expanding beyond Metro Manila into growth areas such as Central Visayas, Western Visayas, Central Luzon, Calabarzon, Davao and Northern Mindanao as infrastructure investments improve connectivity and decentralization creates new economic hubs.
Business News Asia
