MANILA, Philippines (Corrected, Oct. 28, 2022, 7:13 p.m.) — Philippine offshore gaming operators exiting the country won’t leave the real estate market scarred should the Marcos Jr. administration decide to ban them.
That was the assessment of global real estate management firm Colliers Philippines, especially since POGOs currently cover 5% of total leasable office space in the country.
“From our assessment, the industry has minimal exposure. It’s not going to cause a collapse,” said Kevin Jara, Colliers associate director of office services.
Colliers’ findings dispute previous news reports disputing that a ban on POGOs would “trigger a real estate crisis.” The Marcos Jr. administration is still mulling on a decision on POGOs. Some senators railed against the presence of POGOs in the country, considering the spate of kidnappings and illegal work permits.
READ: Senators mull moves to ban POGOs amid kidnapping cases
For one, some Congress lawmakers note that their exit would cost the Philippine economy P65 billion in revenues.
RELATED STORY: Philippines to lose P65 billion with POGO shutdown | POGOs come under scrutiny again in Senate probe on kidnappings
The real estate management firm noted that POGO's 5% market share has since declined from a high of 12%. Broken down, Colliers noted that POGOs, dominated by mainland Chinese workers, currently occupy 650,000 square meters of office space.
5 years
Collier's Jara noted that if POGOs are forced out, this would only leave 650,000 square meters of office space vacant. “It will still take around five years to fully absorb those plus the 2.4 million square meters that are currently vacant,” he said.
The Manila Bay area and Alabang are two areas in the economic capital that seem to be reeling from the crackdown on POGOs, according to Colliers. This meant that there will be more office space vacancies in those areas.
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Colliers noted that the vacancies could eventually be filled by the business process outsourcing sector. The sector is expected to expand in the coming years, especially since the national government granted them work-from-home privileges.
For this year, the Bangko Sentral ng Pilipinas forecasts BPO earnings to grow 9% year-on-year, slightly lower compared to the 9.4% annual uptick recorded in 2021. In 2023, annual growth of BPO earnings is projected to slow to 5%.
Jara noted that the sector occupied over million square meters of office space. Colliers projected the sector will manufacture demand of over 200,000 square meters until 2028.
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As it is, the BPO sector could soon find itself expanding its presence in populated provinces.
“Even if POGOs come back in a big way, it’s not enough to take up vacated space since the pandemic started,” he said.
“Let’s give other sectors a chance to contribute in the space,” Jara added.
Editor's note: In a previous version of this story, some figures were erroneously reported. This article has been amended to correct those errors.