POGOs eye ‘revenge comeback’ as office space inquiries surge

Philippine offshore gaming operators (POGOs) are eyeing a “revenge comeback” in the Philippines with inquiries for office space surging after over a year of inactivity, Leechiu Property Consultants (LPC) said Tuesday.

Mint Residences

At a virtual briefing, LPC said POGOs have started to actively seek new office spaces for the first time since March 2020, driven mainly by measures on POGO taxes, and the anticipated reopening of Philippine borders.

“What I have been told by very prominent players in the industry is that they have a ‘revenge comeback’ for the Philippines,” LPC Chief Executive Officer David Leechiu said.

Senate last month approved on third reading Senate Bill 2232, which imposes 5% tax on the gross gaming revenue or receipts derived from their gaming operations, addressing tax concerns on the industry.

President Rodrigo Duterte earlier this month also said he is now in favor of the increased operations of casinos and POGOs to raise government funds, a turnaround from his remarks in 2018.

“The POGO sector has really been responsible for uplifting, not just the property market, but the consumer market, the tourism market in the Philippines,” Leechiu said.

“We believe that they are a significant contributor to this economy and if we want to get out of this crisis faster, we fully support the President’s call to support the expansion in the Philippines,” he added.

POGO inquiries for office space are estimated at 17,000 square meters. Some 27% of the players exited the country in the past year, amid the COVID-19 pandemic.

According to Leechiu, spaces are readily available for POGO players as developers are “more than willing” to lease out with significant discounts from pre-COVID prices just to start generating rental income.

This will then also impact residential prices, particularly on rental prices, as every square meter of office space occupied by POGOs translates to another square meter of residential space needed.

In the same briefing, LPC noted that office demand is on the road to recovery, led mainly by the information technology and business process management sector.

Demand in the second quarter is up 38% from the first three months, with the first-half figure already at 75% of the full-year 2020 figures.

“Certainly 2020 was a year of challenges for the property market. But the office and residential segments have proven their resilience and capital values have held strong,” said Leechiu.

“Thus we remain optimistic that the Philippines will continue to be a major real estate growth of the world,” he elaborated. -MDM, GMA News