BPOs could take over vacated POGO spaces— JLL

The ban on Philippine Offshore Gaming Operators (POGO) imposed by President Ferdinand Marcos Jr. during his third State of the Nation Address last week will only slightly impact the real estate industry, as edifices made and rented for POGO operations are not that sizable.

With this, Janlo de los Reyes, head of Research and Consulting at JLL Philippines, stated during the Second Quarter 2024 Market Overview on Wednesday that business process outsourcing (BPO) and IT-BPM could even take over the spaces vacated by POGO operators, primarily located in Pasay and Paranaque City areas.

“The vacancy rates will not be that sizeable, I think, given the volume of POGOs are not as significant as before. During the pandemic and the latter part of 2009, there was a bit of a slowdown in POGO operations, even though some of them have exited the market. That was carried out in 2020 or during the Covid 19,” De los Reyes said.

However, when it comes to rental rates, POGO exit will have an impact, seeing a softening of rental rates in Pasay and Parañaque, as these buildings will be vacated and office demand is quite weak and soft at the moment.

He said the rentals in Pasay and Paranaque may decrease to below P1,000 per square meter per month given due to reduced demand.

“It would take time for these vacated offices to be filled up. It may impact the market for two to three years but there is a BPO demand coming in,” De los Reyes added.

In his presentation, De los Reyes said that for the first half of 2024, the BPO sector remains the top occupier of office space at 39.9 percent, followed by corporate/traditional occupiers at 34.9 percent, while Internet Gaming Licensees (previously POGOs) are only at 25.2 percent.

The top cities that have shown a significant increase in leasing volumes are Taguig, Makati, Paranaque, Pasay, Quezon City, Muntinlupa, Pasig, Mandaluyong, other cities, and Manila.

Jobs fair for affected Filipino workers

As thousands of Filipino workers are bound to lose jobs with the shuttering of POGO operations, the Philippine Economic Zone Authority plans to assist by bridging these workers to the IT-BPM industry by organizing job fairs, in partnership with the Department of Labor and Employment (DOLE).

Some POGO activities, such as software development, are complementary to IT, so we believe these workers can transition to the IT sector,” said PEZA Director General Tereso Panga during a separate media briefing at the signing of a Memorandum of Agreement and Registration Agreement for Victoria Industrial Park in Pasay City.

“We are in talks with DOLE, IBPAP (IT and Business Process Association of the Philippines) for those employees who would want to work in gaming. We see complementary activities in the POGOs as some of them are involved in software development. So, I think they can easily migrate to the IT sector. If we talk about talents involving software development and design, together with IBPAP, we can easily absorb these former POGO employees,” said PEZA director general Tereso Panga in a separate media briefing during the PEZA and Food and Drug Administration signing of a Memorandum of Agreement and the signing of a Registration Agreement to seal the proclamation of Victoria Industrial Park as an ecozone on Wednesday in Pasay City.

Labor Secretary Bienvenido Laguesma mentioned that profiling and assessing the skills of Filipino workers who would be affected by the President’s total POGO ban is underway. He emphasized that identifying the total number of affected employees is crucial as such details will allow them to determine appropriate interventions to support their transition to new work opportunities.

He said that as of now, 28 out of 79 internet gaming licensees identified by the Philippine Amusement and Gaming Corp. have submitted lists of their Filipino employees to the agency’s National Capital Region office.