POGOs to continue driving office space demand

By Arra B. Francia and Vincent Mariel P. Galang, Reporters
DEMAND FOR office space from offshore gaming operators is expected to remain upbeat despite the government’s efforts to tighten regulation on the industry, as property consultants noted such moves will legitimize their presence in the country.
The Bureau of Internal Revenue (BIR) last week asked the Philippine Amusement and Gaming Corp. (PAGCOR) to require Philippine offshore gaming operators (POGOs) to present proof of tax registration and payment when renewing their licenses.
Property consultancy Colliers International Philippines said there are currently 57 holders of POGO licenses in the country, most of which also have sub-licenses.
“This is just a step of securing the legality of their operations. We do not see this hindering or obstructing the growth of offshore gaming operations here,” Colliers Research Manager Joey Roi H. Bondoc said in a phone interview last week.
In 2018, POGOs accounted for 21% or 303,000 square meters (sq.m.) of the total net take-up of office space in Metro Manila. Since 2016, POGOs have taken up about 710,000 sq.m. of office spaces, according to Colliers’ fourth-quarter property market report.
“We still see offshore gaming companies continuously acquiring additional office space here in Metro Manila,” Mr. Bondoc said, adding that POGOs are supervised by the Philippine Offshore Gaming Operations Office.
For real estate consultancy service firm Pinnacle Research, proof of tax registration and payment are basic requirements for any business, and should be a welcome change for POGOs to “further professionalize the industry.”
“Though we believe there will be complaints from some quarters mainly on the issue of too much intervention from the government which might impact the industry’s viability, it should be pointed out that every industry in the Philippines receives some form of intervention and regulation,” Pinnacle Research said via e-mail when sought for comment.
BIR had initially issued Revenue Memorandum Circular 102-2017 back in 2017, which outlined taxes for POGOs. It is now asking PAGCOR to step up enforcement.
Meanwhile, Pronove Tai International Property Consultants called this a “win-win situation” for both parties.
“The government will benefit in terms of revenue collection, while it acknowledges the significant contributions of POGOs in economic activities particularly in the property sector,” Pronove Tai Chief Executive Officer Monique Cornelio-Pronove said in an e-mail interview.
Ms. Cornelio-Pronove also said this indicates the improving regulatory environment in the country, which could strengthen POGO operations here.
“However, with the continuing influx of foreign workers entering the country, the Bureau of Immigration and Department of Labor and Employment should intensify measures to prevent overstaying tourists who stay for work without securing the proper work permits,” Ms. Cornelio-Pronove added.
Alongside tighter regulation, Pinnacle Research suggested that the government offer incentives to POGOs — similar to what is given to the business process outsourcing industry — so that they may continue to see the Philippines as an attractive location.