The order by President Ferdinand Marcos Jr. banning all Philippine offshore gaming operations, or POGO, will impact the market for office space in Metro Manila but not as substantially as it would have had the prohibition been made prior to the COVID-19 pandemic, diversified professional services and investment management firm Colliers said.
It noted that at the peak of POGO demand for office space in 2019, these gaming operations occupied nearly 1.3 million square meters of office space—around 10 percent of total office space stock in Metro Manila—and drove rental rates higher. In the Manila Bay Area, for example, rental rates then doubled to P1,500 per square meter from P750 per square meter prior to the POGO mad rush.
“POGO-occupied spaces significantly declined to just 3.5 percent of the office stock in Metro Manila, which to our view will still impact the office market,” Dom Fredrick Andaya, executive director of Colliers’ Office Services, wrote in a commentary on the POGO ban.
“However, there is comfort from the fact that major developers’ exposure to this industry has also gone down to negligible level even while other demand drivers like the IT-BPM companies, traditional, local and multinational companies, and government agencies continue to take up office spaces,” Andaya added.
In his order, given during Monday’s state-of-the-nation address, President Marcos ordered the Philippine Amusement and Gaming Corp. to wind down all POGO licenses by the end of this year, highlighting the disorder those gaming operations bring over their contribution to job creation and government revenue.
PAGCOR said POGOs provide over 25,000 jobs for Filipinos and contribute P40 billion in taxes and other fees to the public coffers.
Andaya said the lack of detail on how POGOs will be banned and their winding down needs to be addressed, especially in the case of internet gambling licensees and back offices supporting gaming firms within special economic zones. These economic zones are not under the jurisdiction of PAGCOR and have been operating even before POGOs were created.
Added to this ambiguity, he pointed out, is whether the ban will be implemented through an act of Congress, an executive order from President Marcos, or an order from PAGCOR. He pointed out that Pasig City banned POGOs by passing an ordinance in December 2022 disallowing renewal of POGOs business permits.
“Until the implementing rules and regulations of the POGO ban are released, Colliers expects that POGO occupiers will take a wait-and-see stance,” Andaya said.
