Philippines Facility Management - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2024 - 2029

The Philippines Facility Management Market was valued at USD 3.4 billion in the previous year and is expected to register a CAGR of 6.31% during the forecast period to become USD 4.95 billion by the next five years. The market sizing estimates reflect the revenue generated by the market vendors of the country from their FM services, including both hard and soft services used by various end-user segments, such as commercial, institutional, public/infrastructure, and industrial segments, which are managed by both in-house and outsourced team of the vendors operating in the Philippine market.

Key Highlights

• The market's growth is supported by the infrastructural development in the country and the governmental support in building projects in the public-private partnership model because the country's newly developed infrastructure would require FM services for managing and maintaining the facilities.
• For instance, according to the country's National Economic and Development Authority, in January 2023, more than 3,600 infrastructure projects costing a combined USD 372 billion have been planned to be completed by 2028. In addition, the country has planned to add a total of 206 projects worth USD 159 billion, out of which 136 are related to physical connectivity, nine to digital connectivity, 42 to water resources, eight to health, and two to power and energy, and so on.
• Additionally, the country is witnessing several expansions by leading organizations, creating an opportunity for the soft and hard FM market. For instance, in April 2023, SM Investment Corporation announced to invest approximately P90 billion (USD 1.64 billion) in capital expenditure to propel its expansion of residential developments, malls, and retail stores. The company intends to open at least three malls in 2023.
• Similarly, in June 2023, The PLDT Group announced plans to build a 12th data center facility in the Philippines to deliver digital innovation and boost the country's regional competitiveness. Through this facility, the company aims to help the Philippines be the next hyper-scaler hub of Asia and support the digital transformation journey.
• However, the lack of awareness of FM services and their benefits among the country's industrial sector of all sizes and types is the major challenge for the market's growth in the Philippines. For instance, a major portion of end users and small and medium-sized businesses continue to avoid FM because they are either unaware of or possibly skeptical of such long-term benefits, even though most multinational corporations operating in the country are aware of them.
• The COVID-19 pandemic initially restricted the growth of FM services in the Philippines. The country was compelled to cease public transportation operations due to the social distancing and lockdown guidelines. Those who relied on public transportation for daily mobility experienced reduced access to crucial facilities due to such disruptions, which impacted the business of the market vendors having soft and hard service contracts with the public transportation companies.
• The organization's priorities in the cleaning services after the COVID-19 pandemic and the country's government initiatives supported the work-from-office trend in the country, which jointly created an opportunity for FM services in the post-pandemic time in the Philippines.

Philippines Facility Management Market Trends

Soft FM Offerings Segment is Expected to Hold Significant Market Share

• Soft services include security, recycling, cleaning, pest control, handyman services, grounds maintenance, and waste management. FM firms have identified high-level cleaning services as a growth area for their businesses based on the rising complexity of projects across various parts of the country.
• The COVID-19 outbreak catalyzed changes in how facilities were managed and services were delivered. As the organizations going forward will require careful consideration and tailored plans, the role of FM service providers can also become more strategic and long-term. The consecutive increase in commercial real estate is also expected to present growth opportunities for the incumbents contending with difficulties, such as congestion in mature markets. Although the present market penetration remains limited (relatively), the demand is expected to constantly rise, with the impact of factors such as establishing new branch offices and outsourcing soft facility management.
• The Philippines is a lucrative market with significant demand for soft FM services. The country has witnessed growing infrastructure, contributing to the market's growth. For instance, the New Clark City (NCC), with an estimated land area of 9,450 hectares, was intended to be an airport-driven metropolitan region focused on high-end IT-enabled businesses, aviation and logistics-related enterprises, tourism, and other sectors. The project is now under construction and has received PHP 308.60 million (~USD 5.7 million) in financial assistance.
• According to the National Economic and Development Authority, roughly 76 projects totaling USD 81 billion are under transportation. Demand for the facilities management industry will increase as the country's infrastructure projects expand. Manila Metro Rail Transit (MRT) Line 7 is a 22.8-kilometer-long elevated rapid transit line currently under development in the Philippines. The elevated line will run 14 stops from North Avenue in Quezon City to San Jose del Monte in Bulacan. The Philippines' Department of Transportation and Communication (DOTC) owns and manages the project. Therefore, the growing infrastructural development in the country is expected to significantly drive the demand for soft services during the forecast period.
• The growing real estate industry is expected to drive the market. According to the Philippine Statistic Authority data published in January 2023, the country has been generating an increasing trend in the Gross Value Added (GVA) in the real estate industry sector, which includes the physical infrastructures of the country and creating an opportunity for the FM service providers in the country because of the applications of FM hard and soft services in the buildings.
• Furthermore, the increasing investment in smart building technologies will propel the demand for the studied market. To improve employees' comfort, increase energy efficiency, and manage building assets, companies are integrating facility management. Soft FM helps organizations promote the health and well-being of their employees. Organizations can guarantee uninterrupted everyday operations with frequent maintenance, repairs, and upgrades.
• Moreover, several leading players are expanding their operations in the country, which further supports the growth of the market. For instance, in July 2022, Sunland Development Corporation announced that it would expand its real estate business in Manila in the next 3-5 years. Through this expansion, the company will construct a 15-story office building, warehouses, and other commercial buildings to serve clients and strengthen its position in the market.

Public/Infrastructure Segment is Expected to Hold Significant Share in the Market

• Public/infrastructure end-user scope covers the FM applications in the office buildings at federal, state, and local levels, justice departments, office buildings for administrative work, and other such projects. The infrastructure comprises facilities covering water and land transportation. Various buildings use services such as fire alarms and safety, energy management solutions, CCTV monitoring services, and other integrated facility management services.
• The FM service providers are expected to gain significant traction from government agencies to manage their facilities, demonstrate a commitment to sustainability, and provide a safe, healthy environment for employees, especially after the extended COVID-19 shutdowns. In addition, government agencies are focusing on energy efficiency and sustainability performance owing to energy government regulations such as the 'Efficiency and Conservation Act," which urges government offices to ensure efficient energy use. Such developments will further drive the demand for facility management services in government buildings for energy management practices across the country.
• Construction projects in multiple sectors are expected to develop rapidly, which is anticipated to create a considerable growth of investments toward infrastructure and building structures in the country due to the government's support, which would drive the FM service market's adoption. For instance, under the country's 'Build, Build, Build' program, the Philippine government announced spending USD 164.7 billion on infrastructure over the next decade.
• The government in the country is focusing on the growth of the infrastructure sector and has been running several projects to modernize it. For instance, according to the data from the Department of Public Works and Highways (Philippines), as of January 2022, 15 flagship infrastructure projects worth PHP 94.6 billion (USD 1.67 billion) out of the 112 infrastructure projects of the Philippine government had been completed, while 77 projects were under construction and 27 were in the pipeline.
• These 112 flagship infrastructure projects are divided into various sectors, such as 76 projects in transport and mobility, 12 in urban development, 10 in water resources, eight in ICT, four in health, and two in power and energy projects.
• Similarly, in March 2023, The government of the Philippines announced the approval of 123 new infrastructure projects to improve physical connectivity, such as long-distance railways near the capital and in southern and central Philippines, and an upgrade of the aging Manila International Airport, the country's main gateway. This list also includes projects in health, digital connectivity, power & energy, agriculture, and others, and water infrastructure like flood management and irrigation.
• Over the forecast period, the growth in public infrastructure projects in various sectors across the country is analyzed to drive the demand for integrated and bundled facility management services in the public infrastructure to reduce service costs and the government's spending on developing public infrastructure.

Philippines Facility Management Industry Overview

The Philippines facility management market is fragmented with the presence of major players like Atalian Global Services Philippines Inc., Servicio Filipino Inc., Meralco Industrial Engineering Services Corporation, SGS Philippines Inc. (SGS SA), and Cushman & Wakefield PLC. Players in the market are adopting strategies such as partnerships, mergers, innovations, and acquisitions to enhance their product offerings and gain sustainable competitive advantage.

In February 2023, Cushman & Wakefield PLC opened a Shared Services Center (SSC) in Manila, Philippines. The center is located on the 32nd floor of the BDO Ecotower along 9th and 32nd Street, Bonifacio Global City, Metro Manila.

In June 2022, to advance sustainability in the Philippines, Seochang Electric Communication Co. Ltd. and the Meralco Industrial Engineering Services Corp. (Miescor), a division of the Manila Electric Co. (Meralco), partnered on a clean energy research and development initiative.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support