POGO office demand to continue until 2022

MANILA, Philippines — Sustained office space demand from Philippine offshore gaming operators (POGO) can be expected until the end of the Duterte administration despite the clampdown on the sector, a property services firm said.

“I think we’re going to see (demand from POGOs) for the next three years until 2022,” Colliers International Philippines research manager Joey Roi Bondoc said, noting that the growth of the POGO industry was established during the Duterte administration.

In its third quarter property report, Bondoc said the offshore gaming sector accounted for 37 percent of total office transactions from January to September this year, amounting to 442,000 square meters.

This is higher than the 296,000 sqm take-up in the same period last year, making it the highest demand driver of office space among sectors.

“Relentless take-up of office space by Philippine offshore gaming operators has done much to dispel concerns about the sustainability of offshore gaming operations,” Bondoc said in a report.

The government has been clamping down on POGOs in recent months due to tax issues.

The Philippine Amusement and Gaming Corp. (PAGCOR) is currently implementing a moratorium on POGO licenses amid concerns raised on the industry, while the Bureau of Internal Revenue (BIR) continues its crackdown on unregistered firms.

Records from the BIR showed that P1.63 billion in revenues were withheld from the POGO industry in the first eight months of the year.

In addition, the House of Representatives said it is set probe issues in the POGO industry, including the surge of unregistered foreign workers in the country.

Despite the clampdown, Bondoc said accommodating government policies and regulation is seen to propel the growth of the POGO sector in the next years.

Moving forward, Bondoc said the next administration should think twice before pulling the plug on the POGO industry due its tremendous economic contribution.

“There is huge economic contribution to these POGOs directly and indirectly and for the next administration, even if he or she is on the other side of the political fence, he or she might really have to think twice before pulling the plug on POGO,” Bondoc said.

“Perhaps look at implementing, accommodating a friendly policy environment to the POGOs,” he added.

Colliers International Philippines managing director Richard Raymundo said the clampdown on the POGO industry has resulted in property developers being more strict on documentation requirements from POGO tenants.

“Now they’re more strict on documentation, they’re more strict on the pogo license, strict on the LONO (letters of no objections) license from the cities, strict on visa,” Raymundo said.

“I think that’s one of the good things that came out of the clampdown a couple of months ago, there are  developers doing more due dilligence,” he added.

With the demand from POGOs expected to continue in the coming years, Colliers is urging developers to explore areas outside Metro Manila that could cater to this industry.

“But with tight office vacancy across Metro Manila, these firms are compelled to look for space outside the capital,” Colliers.

The property services firm identified Clark in Pampanga, Cebu, Cavite and Laguna as viable options for this industry.