POGOs seen to edge out BPOs as top PH office space takers by yearend – property consultant

Metro Manila (CNN Philippines, July 10) — Philippine Offshore Gaming Operators (POGOs) are seen to dominate office spaces in the country by year-end, edging business process outsourcing (BPO) firms, a property consulting firm said.

In a report released Wednesday, Leechiu Property Consultants (LPC) forecasted that POGOs will be the top demand drivers in Metro Manila offices by the end of 2019 due to their faster site selection and the moratorium on new tax incentives for BPOs.

LPC said offshore gaming has been the fastest growing industry in the local office market since President Rodrigo Duterte took office in 2016, with POGOs only coming in at a close second to BPOs in the first half of 2019 in the demand for offices.

BPOs accounted for 37 percent of the take up of 775,000 square meters (sqm) of office space in the first half of 2019, occupying 284,000 sqm, while POGOs occupied 253,000 sqm, with substantial take up in Bay City in Pasay, Makati and Alabang in Muntinlupa.

POGO firms’ demand for office spaces in Metro Manila have steadily increased in the past three years, from a mere nine percent share to 36 percent in the first half of 2019, when they took up 242,000 sqm, while BPOs took up 244,000 sqm of office spaces.

The uptick of POGOs in Metro Manila have also sent residential condominium rates skyrocketing by as much as 80 percent in Bay City in the last three years.

“Prices of studio units have increased from ₱18,000 in 2015 to ₱32,000 per unit per month in the first half of 2019. One bedroom units have gone from ₱25,000 back in 2015 to ₱55,000 per unit per month, while a two-bedroom unit’s price rose from ₱55,000 to ₱90,000 per unit per month,” the LPC report said.

LPC expects that once office dpace supply dwindles in Bay City, POGOs would head to Quezon City, which is currently dominated by BPOs. Only one percent of office space in Bay City and Alabang remains vacant in the first half .

POGOs have also expanded outside Metro Manila, having taken up a total of 130,000 sqm of office space in Laguna, Cebu City, Clark in Pampanga and Cavite since 2016. LPC predicted that POGOs would expand further in other cities with the completion of infrastructure projects.

Ongoing infrastructure developments in Clark under the Duterte administration’s “Build, Build, Build” program have turned it into the most favorable area outside Metro Manila for BPOs and POGOs.

BPO firms are spreading outside Metro Manila as well, but their expansion to other areas has been hampered by the slow approval of economic zones, which would grant them tax incentives.

The latest LPC report echoes a similar report last month, which stated that POGOs have driven up rent in Metro Manila by 27 percent.

POGOs run casinos and similar betting games through the Internet. However, these companies are currently in hot water for reportedly hiring foreigners, mostly Chinese, for their operations without paying correct taxes.

CNN Philippines News Writer and Correspondent Sandra Zialcita contributed to this report.