BUSINESS

POGOs to continue driving Philippine property sector

TAGs: PAGCOR, Philippine Offshore Gambling Operators, Philippines

Philippine Offshore Gaming Operators (POGOs) have propped up real estate in the country, and are expected to continue doing so, according to property consultancy firm JLL Philippines.

POGOs to continue driving Philippine property sectorLocal news outlet BusinessWorld reported that the firm’s Country Head Christophe Vicic, during a roundtable discussion, stressed that much of the investment in POGOs was coming from China, and helped offset a drop in the growth of business process outsourcing (BPO) firms in the country.m

“We cannot forget that the investment from China is critical to this country at any level, residential, commercial, construction, infrastructure… The Chinese money is important to this country, it’s part of the GDP [gross domestic product] growth,” Vicic said.

Chinese nationals were said to be increasing in the Manila Bay Area, with POGOs hiring them. This has not only raised demand in commercial space, but also in residential developments.

In Vicic’s view, the surge in employees from abroad comes with its challenges, with many unable to speak English well, in a country where Filipino and English are the most commonly used languages.

He advised for landlords to maintain a variety of different types of tenants, and not to rely solely on POGOs for income.

“If I were a landlord I would not rely on POGO for a long-term strategy only because it’s highly visible and politically-charged because of the nature of the industry,” Vicic said.

Anchor Land Holdings, Inc. President Digna Elizabeth Ventura, weighing in at the roundtable, said her company was working with operators to ensure rules were being followed by tenants from POGOs.

JLL Philippines Head of Research and Counseling Janlo delos Reyes said that as it is, prices in the Bay Area have been rising, and are now comparable to other top locations in Metro Manila, such as in the cities of Makati and Taguig. This has resulted, according to him, in the domestic market “being pushed toward the fringes and other areas.”

Another real estate consultancy, Colliers International Philippines, has pointed out how offshore gaming firms made up 25% of all office property deals in Metro Manila during the first three quarters of 2018. The firm also called on developers to expand in order for demand from these gaming firms to be met.

The POGO program, launched in 2016 by the Philippine Amusement and Gaming Corporation (PAGCOR), is intended to promote business from gaming companies whose clients are based outside the country. The state regulator expects gaming revenue from these companies to increase, even as the Bureau of Internal Revenue has targeted them, with a circular from the agency requiring them to register and pay taxes, classifying them as resident foreign corporations.

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