You love them or you hate them, these POGOs or the so- called Philippine offshore gaming operations (POGOs).
Calls are mounting from different sectors to ban POGOs because of crimes related to the industry and indeed, authorities must address the problem of illegal POGOs to weed out illegal aliens. Agencies must also step up law enforcement to ensure peace and order in the country.
The Philippine Amusement and Gaming Corp. (Pagcor), for its part, gave this comment: “In light of the arrest of Chinese and other foreign nationals reportedly involved in illegal online gaming recently, Pagcor would like to clarify that the activities of said individuals are not in any way related to legitimate POGOs.”
For the real estate industry, a total ban on legitimate POGOs could be detrimental, said real estate consultant David Leechiu, CEO of Leechiu Property Consultants (LPC).
The complete ban on POGOs is expected to translate to an additional office space vacancy of 1.05 million square meters—the space currently occupied by the remaining POGOs—and this in turn, could swell losses from POGO exodus to roughly P190 billion, according to estimates from LPC.
This is broken down as follows: P54.3 billion to P57.1 billion in income tax from foreign FTEs (full-time equivalent); P52.5 billion estimated loss in fit-out cost or the cost of providing furniture, fixtures and technology; P28.6 billion loss in annual housing rent across 2.4 million square meters of residential space; P18.9 billion loss in annual office rent; P11.4 billion annual expenditure on commissary meals; P9.5 billion loss in annual electricity cost; P5.8 billion estimate loss in annual taxes; and P5.25 billion estimated loss in the annual revenue of the Philippine Amusement and Gaming Corp. and P952 million loss in daily spending.
In a recent briefing, Leechiu also said an outright and blanket ban on POGOs would lead to an oversupply in the sector and could cut rental rates by more than half which would be detrimental to property players.
The Bay Area, for instance, used to fetch P1,500 to P2,000 per square meter from POGOs and about P750 to P900 per sqm from other tenants but with rising vacancy, Bay Area rents are now down to P600 to P500 per sqm, industry data showed.
Other business districts such as Makati and Ortigas could potentially face the same situation and set prices back to pre-POGO years.
The POGO sector has already vacated 630,000 sqm of office space, which led to contractions in the industry in the last three years.
This translated to P25.93 billion losses in office rent from 2020 to present; P17.1 billion in housing rent from 2020 to 2022; P2.51 billion estimated loss in annual tax; P12.9 billion in estimated loss in electricity cost from 2020 to 2022 and P31.5 billion estimate loss in fit-out cost from 2020 to 2022.
Leechiu said that if an additional 1.05 million in office space is vacated, it’s going to translate to wider losses.
Albay 2nd district Rep. Joey Salceda, meanwhile, said his computations showed that total aggregate effect of a total POGO ban is at P128.5 billion from tax revenues, rental revenue, consumption of utilities etc.
