Locations outside Metro Manila attract POGO

A number of factors make it so. These are the combination of international access, better connections to Metro Manila via rail and other new roads in addition to existing tax incentives and massive amount of available talent.

Ongoing infrastructure projects outside of Metro Manila are attracting Philippine offshore gaming operators (POGO), which now dominate the domestic office market in terms of annual growth, a property consultancy firm said.

Leechiu Property Consultants (LPC), in an earlier briefing, said out of the 1.74 million square meter (sqm) of space occupied by POGO firms as of 2019, eight (146,000 sqm) were in Cavite, another eight percent (140,000 sqm) were in Pampanga, while 7 percent (65,000 sqm) were in Laguna.

Meanwhile, LPC chief executive officer David Leechiu said Clark, the poster city for the government’s “Build, Build, Build,” program, serves as the “new frontier.”

“A number of factors make it so. These are the combination of international access, better connections to Metro Manila via rail and other new roads in addition to existing tax incentives and massive amount of available talent,” he said.

Data gathered by LPC also showed that among provinces outside Metro Manila, Cebu will be the largest supplier of office space in the next five years at 706,000 sqm, further highlighting possibilities for growth both for the POGO and the Information Technology & Business Process Management sector.

The latter ruled demand in the province this year with a 144,000-sqm take up compared to POGO’s 131,000 sqm.

On the whole, the Philippines’ office supply is seen to grow by 34 percent to 4.8 million sqm from 2020 to 2024, due to the “unprecedented level” of developments outside of Metro Manila, which will add 1.43 million sqm in the existing 1.98 million supply.

Total Philippine office demand this year hit 1.7 million sqm, up by 6 percent from 1.58 million sqm in 2018, with the POGO industry taking up 44 percent of the total, outpacing the IT-BPM’s 34 percent share.

Meanwhile, the Bay area still tops the list with a share of 38 percent, or a staggering 657,000 sqm. Bay area remains the main location for POGO operators due to its proximity to the national airport and commercial and entertainment areas, followed by Makati with 17 percent (292,000 sqm).

However, Makati Mayor Abby Binay has issued a directive to stop giving business permits to POGO firms to halt illegal activities such as criminality and prostitution linked to its growth in the central business district.

Leechiu said the operators can always set up shops in other districts considering there’s enough supply.

LPC’s data states that Ortigas Center in particular will be the largest supplier of office space in Metro Manila in the next five years at 714,000 sqm, followed by the Bay area with 634,000 sqm and Quezon City with 500,000 sqm.

POGO growth is also expected to continue pushing property prices up, with the BGC seen going beyond its current P1,400 sqm asking rate, LPC said. Rental rates in the Bay area, which already stood at P1,600 per sqm, are still expected to rise due to the high number of primarily foreign POGO employees with ready money to pay rent in advance.