An exodus of Philippine Offshore Gambling Operators (POGOs) appears to indeed be underway, as a new real estate report indicates that more than half of commercial spaces vacated so far in 2020 were due to this sector. But while industry analysts have predicted this would be a blow to the Philippines economy, the full report indicates that may not be the case.
The latest report from Leechiu Property Consultants indicates that 8 percent of all commercial office space has been vacated as of the end of June, with POGOs representing 54 percent of that amount. Hardest hit by those vacancies are Makati and Quezon City, which saw the majority of the exodus.
The report specifically notes that these new vacancies were created by tax regulations and Covid-19 restrictions, which “curtailed POGO growth.”
Contrary though to the doom and gloom predictions some have made, overall office rentals increased during the second quarter, thanks to the Information Technology and Business Process Management or IT-BPM sectors. Overall rentals increased byu half, with Cebu, Taguig and Ortigas having the best growth.
But growth could have been better had the POGO sector managed to stay strong. While the shrinkage may either be due to the pandemic or over taxation, the real estate consultancy group argued POGOs should receive more support. “The sustained growth of these sectors will allow us to bounce back from this pandemic swiftly. We need as many employers as possible to help our economy,” the report read.
Assuming POGOs haven’t left for good and can start working through their problems with the government, Leechiu predicted the sector could rebound by September.
The big question is if they will come back at all. The Philippine Gaming and Amusement Corp (PAGCOR) has previously warned that Malaysia is starting to court POGOs who may be fed up with the new taxes Philippines lawmakers are attempting to impose on them, and could steal operators away during this difficult time.
Bureau of Internal Revenue Commissioner Caesar Dulay dismissed those fears, believing that Malaysia was far too Muslim to allow a gambling industry to take root.