The Philippine business process outsourcing (BPO) industry might experience a surge in demand, according to a report by real estate consultancy firm Colliers Philippines. This surge is expected as U.S. companies seek cost-cutting measures in response to President Donald Trump’s new tariffs.
Rising production costs in the U.S. drive businesses to explore offshore outsourcing, and the Philippines stands out as a prime destination.
The tariff policy behind the shift
Since beginning his second term in January 2025, President Trump has revived a series of protectionist trade measures, including a 25% tariff on imports from Canada and Mexico and a 10% tariff on goods from China. These tariffs could increase production costs for U.S. businesses, particularly those dependent on imported goods.
As a result, American companies are under pressure to offset rising expenses. Offshore outsourcing is a practical and cost-effective solution, making the Philippines an attractive option for non-core and support functions.
How the Philippine BPO industry stands to gain
Colliers Philippines believes that Trump’s aggressive tariff policies will drive U.S. businesses to adopt cost-efficient strategies to maintain profitability. The Philippines, one of the world’s top outsourcing destinations, is well-positioned to meet this demand.
“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,” Colliers said. One alternative is outsourcing non-core and support operations to countries with lower labor costs while maintaining expertise.
The country’s large English-speaking workforce, cultural alignment with the West, and competitive labor costs make it an attractive outsourcing hub. Services such as customer support, IT, finance, and human resources could see increased demand.
Furthermore, Metro Manila’s office vacancy rate is 19.8%, partly due to the exit of offshore gaming operators. BPO firms can negotiate favorable leasing terms, adding to the country’s appeal.
Philippines ready for Trump 2.0
The Philippine government is actively preparing to attract and sustain foreign investment amid these global shifts. The recently enacted CREATE MORE Act, with its implementing rules and regulations (IRR), offers enhanced tax incentives and streamlined regulations designed to make the country more competitive.
“With the signing of the CREATE MORE IRR, we now send a clear message to the world: the Philippines means business,” said Finance Secretary Ralph Recto during the IRR signing ceremony on Feb. 17. “We are ready to compete. We are a dependable economic ally. We offer stability amid uncertainty. And yes—we are Trump 2.0-ready.”
This readiness directly addresses the challenges posed by Trump’s protectionist trade measures. The Philippine government aims to provide U.S. companies with a cost-effective and efficient outsourcing solution during rising production expenses by improving infrastructure, digital connectivity, and workforce skills.
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Miguel, J. A. (2025, March 5). Outsourcing could see boost from Trump tariffs, says Colliers. Manila Times. Retrieved from https://www.manilatimes.net/2025/03/06/business/top-business/outsourcing-could-see-boost-from-trump-tariffs-says-colliers/2067909
CliftonLarsonAllen. (2025, March 4). The Impact of Trump’s Tariffs: A Comprehensive Analysis. Retrieved from https://www.claconnect.com/en/resources/articles/25/the-impact-of-trumps-tariffs-a-comprehensive-analysis
