Rising operating costs and tightening foreign labor restrictions in Western economies are prompting more companies to consider shifting jobs to the Philippines, with some international firms eyeing operations involving 5,000 to 30,000 positions, according to Leechiu Property Consultants (LPC). The Philippines is one of the world's most established offshore service destinations, giving cost-pressured corporations an existing English-proficient talent base and delivery infrastructure to absorb expanded operations.

David Leechiu, chief executive officer of LPC, said higher inflation, elevated interest rates, and uncertainty over corporate revenues were pushing companies to pursue cost-cutting more aggressively.

"Corporations have accepted that [the Middle East conflict] is going to go on for a while, and the consequence is that inflation is going to hit countries everywhere. Many corporations do not have visibility on their top line, but they have massive visibility on their cost base which is only going to go up," Mr. Leechiu said during the firm's third-quarter market briefing on Tuesday.

"The only way they can show profits and meaningfully move cost is if they offshore to the Philippines and India," he added. Offshoring — relocating business to lower-cost locations while the parent company retains control of the work — is among the few levers large enough to materially move a corporate cost base, which is why it resurfaces whenever margin pressure intensifies.

LPC said stricter immigration policies and foreign labor restrictions in major Western markets were also contributing to greater interest in offshore hiring. Mr. Leechiu pointed to the United States, where tighter immigration rules have made it more difficult for companies to employ foreign workers.

"The US is making it extremely difficult for foreigners to work there and for corporations to employ foreign talent. Because of that, there's been a brain drain… forcing companies all over the US to tap offshore talent through offshoring and virtual jobs," he said.

He also said European investors were looking more actively at Asia amid structural economic pressures in Europe.

"European billionaires are touring this market and buying assets meaningfully because they want to spread their eggs throughout Asia away from Europe, which is facing long-term structural issues," Mr. Leechiu said.

LPC said emerging technologies, including real-time language translation, could expand the Philippines' potential offshoring market to non-English-speaking economies such as Japan, where demographic pressures are increasing labor demand. Such a shift would broaden demand beyond the English-speaking clients that have historically anchored the industry, making translation-tool adoption a point to watch.

Mikko Barranda, LPC's director for commercial leasing, said international companies were also increasingly establishing their own global capability centers instead of relying solely on third-party outsourcing providers. Unlike an outsourcing contract, a global capability center is owned and operated by the parent company, keeping hiring, processes, and data in-house — a structure that signals longer-term commitments to a location.

"Instead of accompanying the US using an outsourcing model, they're doing it themselves. When they come to the Philippines, they're looking to grow massively. They're not looking to just hire 50 people, they're looking at 1,000 to 2,000 people. The confidence of these companies to do it themselves says a lot about their foresight in being in the Philippines much longer," he said.

LPC also noted that demand had increased for managed office arrangements, as companies sought to spread fit-out and other capital costs over longer lease periods rather than shouldering them upfront. The preference underscores how real-estate flexibility is becoming a competitive factor in securing these expansions, since converting upfront fit-out spending into costs spread over a lease preserves capital for hiring. Whether the current inquiries convert into signed leases and actual headcount will show how durable the interest proves to be.

The report was authored by Juliana Chloe A. Gonzales.