Property advisory firm Colliers Philippines has urged developers to modernize and expand their industrial facilities, particularly in central and southern Luzon, as the country’s manufacturing sector continues to attract foreign investments despite global headwinds.

In its H2 2025 Metro Manila Industrial Report released Monday, Feb. 23, Colliers Philippines said industrial developers and warehouse operators should maximize ongoing government efforts to lure high-value manufacturers and investors from both traditional and emerging trade partners.

“The Philippine industrial sector continues to expand in terms of aggregate supply, especially in central and south Luzon. Colliers Philippines believes that improving the business environment is crucial in sending the signal that the Philippines is ‘open for business’ and to entice more high-value manufacturers to locate in the country, eventually benefiting major property players with sizable industrial footprint,” said Joey Roi Bondoc, research director at Colliers Philippines.

Colliers Philippines projects nearly 1,200 hectares (ha) of new industrial space to be delivered between 2026 and 2028, with Central Luzon expected to account for close to 80 percent of this new supply. Developers with a strong footprint in this region are encouraged to strengthen coordination with investment promotion agencies (IPAs), particularly the Philippine Economic Zone Authority (PEZA), “to identify pledges likely to materialize and eventually take up industrial space.”

The report also noted that approved foreign pledges to fund manufacturing projects reached ₱81.4 billion in 2025, with Central Luzon and Calabarzon capturing the bulk of these investments. While this represented a 35-percent year-on-year decline, Colliers said an improvement in global manufacturing sentiment, as reflected by an uptick in the Philippines’ purchasing managers’ index (PMI) to 50.2 in December 2025, could support future industrial growth.

Among the big-ticket investments in the Cavite, Laguna, and Batangas (CALABA) corridor include Samsung, which is investing $1 billion (about ₱58 billion) in a manufacturing facility at Calamba Premiere Industrial Park, and Panasonic, pouring $52 million (around ₱3 billion) into new projects at Laguna Technopark.

With growing demand from e-commerce and logistics firms, Colliers Philippines recommended that developers increase the supply of “modern, PEZA-accredited warehouses”—particularly in Central Luzon, where upcoming developments in the provinces of Pampanga, Tarlac, Bulacan, and Bataan are expected to anchor future manufacturing growth.

“Colliers believes that Central Luzon remains a viable industrial location outside of CALABA given its skilled manpower and improving infrastructure,” the report said. “We also encourage industrial developers to build more PEZA-accredited warehouses in Central Luzon, especially in Clark in Pampanga and New Clark City in Tarlac due to their strategic locations and proximity to the Clark International Airport.”

The report cited the growing demand for advanced facilities that can handle time-sensitive operations from logistics firms like Shopee Xpress, which recently leased a second warehouse with Robinsons Logistix (RLX) in Calamba, Laguna.

Despite the influx of new supply, vacancy rates in key industrial corridors remained stable toward the end of 2025. The CALABA corridor saw its average warehouse vacancy drop to 11.4 percent in the second half of 2025 from 16.9 percent in the first half.

In contrast, Central Luzon’s vacancy rose to 23 percent due to the delivery of new space, although Colliers expects this to normalize as more manufacturers and logistics operators take up leases in 2026.

The firm also noted a “slight drop” in average lease rates in Central Luzon stemming from heightened supply, while rents in Metro Manila and CALABA “remain stable.”

Colliers Philippines emphasized that targeting industries prioritized by PEZA—including automotives, pharmaceuticals, electronics, and aerospace manufacturing—would further drive industrial absorption and create positive spillovers into other real estate segments such as office, residential, and hospitality.

“Colliers Philippines believes that raising the country’s industrial competitiveness is crucial in attracting millions or even billions in foreign direct investments (FDIs),” it said.