POGO industry seen to continue growing

Any losses the country might incur if POGO firms quit operations could be offset by the IT-BPM sector.

Despite recent threats on the operations of Philippine Offshore Gaming Operators (POGO), a top property consultant said that the industry is expected to resume its growth, considering what has transpired during President Rodrigo Duterte’s recent visit to China.

Because there were no anti-POGO statements, and no clear policies made in Beijing, then it looks like it will keep on growing

Chief executive officer for Leechiu Property Consultants David Leechiu said that the POGOs “will continue to expand in the Philippines unless there’s a clear indication that they will be hold out.”

“Again, in all likelihood, because there were no anti-POGO statements, and no clear policies made on that trip, then it looks like it will keep on growing,” Leechiu said at the sidelines of Philequity’s market outlook in Ortigas on Saturday.

Beijing said it will “respect” the Philippine government’s policy as to the rapidly growing online gaming industry, as relayed by the Department of Finance, although Chinese leader Xi Jinping reiterated the country’s stand as to the illegality of gambling involving its citizens.

The POGO industry mostly employs Chinese nationals. The Philippine Amusement and Gaming Corp. (PAGCOR) on August temporarily suspended new POGO license applications pending the results of the probe on the effects of offshore gaming operations in the country.

While the country will “get hurt” should POGO firms quit operations here, Leechiu said that the likely scenario is that the information technology-business processing management (IT-BPM) industry will take over the spaces in the top markets for the POGO industry–the Bay Area, Makati and Alabang– as these are also the top markets for the IT-BPM.

“After having looked at this many many times, I think we will be okay. We will get hurt, it will be painful, but I think it will not be a total disaster,” Leechiu said.

The POGO industry and ITM-BPM industries are firms are expected to require up to 450,000 square meters of office space for the full year.

However, the IT-BPM sector’s growth has been hindered by Duterte’s Administrative Order 18, which bars the Philippine Economic Zone Authority from further approving ecozone applications in Metro Manila, considered as the industry’s hub, to facilitate countryside growth.

The industry’s demand has raised the rent in its most occupied market, too. According to Leechiu, POGO operators, who pay rent up to 24 months in advance, has pushed prices in the Bay Area to up to P1,600 per square meter from just P400 per sqm in 2008.

Meanwhile, PAGCOR has collected gaming revenues worth P11.9 billion from POGO operators between 2016 to 2018. It aims to collect as much as P8 billion from the industry for this year alone.