What changes were introduced by the Duterte administration were regulatory in nature admittedly helped along by an improvement in diplomatic relations with China.

One of the more notorious issues that’s constantly reared its ugly head in media and within these pages is the issue of Philippine offshore gaming operators (POGO).

For the most part the issues we’ve tackled are the unseen social costs that range from simple sanitation issues and unruly behavior, to horribly heinous crimes that range from kidnapping to mutilation and dismemberment. Somewhere in between the misdemeanors and murders, there are prostitution and human trafficking.

As counterpoints the upsides of the POGO phenomenon cannot be quite as easily discounted much less ignored. The Philippines is not a rich country. The measurable financial and economic benefits of incremental taxes and the consumer spending that POGO bring to the equation mitigate the social costs. While a balance between costs and benefits may be difficult to attain or even compute, the objective of our authorities was to achieve such as part of a policy pivot towards our regional neighbors to balance out even greater geopolitical imbalances.

Admittedly there are tensions brewing in the West Philippine Sea first spawned by reckless bravado and stupidity from the last administration when it was us, and not the Chinese, who had inserted a military factor into a delicate, albeit relatively peaceful confrontation. Benigno Aquino III with his new toys escalated into the military arena what should have been dealt with diplomatically. Since then we’ve been trying to live down his stupid act of braggadocio and have been walking a tightrope with regard to POGO.

If the upsides of the POGO phenomenon lie in its economics then perhaps it is best to go into the details of those given the bigger global canvas where we’ve already drawn the annoying downsides. It is only fair. POGO in our midst are part and parcel of our deliberate pivot to a global neighbor.

Allow us then to scrutinize the details of the peculiarity of POGO economics.

Let us start from the economic bubble that seems to have been created in the property sector by the POGO influx where the wave has filled in demand gaps in both office and residential space. A bubble is a phenomenon where something inflates beyond what it should be due to factors far less in magnitude than what the optics show. Where we refer to the POGO bubble this has to do with the increased demand for property due to the POGO influx and the escalation in prices per square meter brought about by the fact that POGO are willing and able to pay top pesos for these.

POGO are however not migrants. They are transients from the third to last tiers of China’s lower-class communities with education and social skills far less than the average Filipino. Their only advantage is their language facilities. This is at the root of the cultural, social and behavioral downsides where they are deemed as increasingly undesirable even where the front-end features the monetary upsides of increasing rental payments.

Almost as immediately as they pay up and move in real values in the property and the community they infect starts crashing. That bubble burst is merely a prelude to the bigger burst should the government start taking stock of total costs.

Many have blamed these unwelcome virtual invasions on Rodrigo Duterte and are praying that when a new government comes in POGO might disappear. Here is the bigger bubble bursting. It should be noted however that it was not Duterte who had brought the POGO to our shores. The flotsam and jetsam have been coming in with the tide since 2003 under the administration of Gloria Macapagal-Arroyo.

What changes were introduced by the Duterte administration were regulatory in nature admittedly helped along by an improvement in diplomatic relations with China. In 2016 rules and regulations were established and eventually POGO licensing was formalized in 2017. It had come when the growth in the business process outsourcing sector had started to slow.

It is uncertain when the POGO property bubble will burst. As we are seeing, like a punctured tire, it may slowly albeit surely be deflating.