The permanent demand for office space from Philippine offshore gaming operators (POGO) is expected to continue in 2020.

POGOs Will Be the Leader in Renting Office Spaces This Year

Monique Cornelio-Pronove, chief executive officer of Pronove Tai International Property Consultants claims in an interview with Business World that despite the limited office supply next year, the offshore gaming sector is still expected to drive office demand but on a slower phase compared to 2019.

Speaking of 2019, according to an announcement made by Colliers International Philippines research manager Joey Roi Bondoc in the period from January to September last year, 37 % (442,000 square meters) from the total number of office transactions refer to the offshore gaming sector.

According to a statement of Cornelio-Pronove in her interview for Business World the main factor of POGOs growth in the office market will always be grounded in the ‘office supply. 

She talked about the 49 new office buildings that will be finished providing 1.14 million square meters for tenants. 

Although not all of the space will be rented by POGOs, it will still be the main industry occupying office spaces, followed by information technology and business process management.

She also explained that POGO sector is expected to slow down next year because of the limited available supply in the Bay Area near Entertainment City.

Yet, Cornelio-Pronove said that many other factors could affect the development of the industry, including the influence of the Chinese government, the possibility of raising tax rates, and scrutiny over criminality related to POGO.

POGOs Face Investigation Over Legislative and Criminal Issues

Another problem could be the unregistered workers within the industry.

Actually, the Philippine Amusement and Gaming Corp. (PAGCOR) is implementing a moratorium on POGO licenses because of these issues. 

In fact, Bureau of Internal Revenue (BIR) has already begun crackdown on companies that are not registered in an attempt to bring back P1.63 billion in revenues not paid by the POGO industry from January to September 2019.

In addition, the House of Representatives has set the investigation of the POGO industry over the legislative and criminal issues that have been raised as their priority for the next session starting Jan 20 2020.

However, Bondoc said warned the next administration that it should consider carefully any decision related to pulling the plug on the POGO industry due to its huge economic contribution.

“Perhaps look at implementing, accommodating a friendly policy environment to the POGOs,” he added.

According to Richard Raymundo Colliers International Philippines managing director the clampdown on the POGO industry has led to stricter documentation requirements from the tenants.

“Now they’re more strict on documentation, they’re more strict on the pogo license, strict on the LONO (letters of no objections) license from the cities, strict on visa,” Raymundo explained.