POGO ban seen to build up Philippines appeal to global firms

CEBU, Philippines — Full-service real estate solutions provider KMC Salvills believes that the Philippine government’s move to abolish the presence of POGO (Philippine Offshore Gaming Operations) could further enhance the country’s appeal to multinational companies seeking to establish or expand their operations here.       

According to KMC Savills chief executive officer (CEO) Joe Curran, while the departure of POGO operators has significantly increased office vacancy rates in the Philippines, this disruption is expected to be temporary.

“Though there may be short-term disruptions in select areas of the office market, I believe the long-term impact will be minimal and well-managed. We see an opportunity here: by addressing the concerns surrounding this sector, the Philippines is positioning itself as a more transparent and globally competitive destination for investment,” said Curran.

A few months ago, President Ferdinand R. Marcos Jr., announced a decisive move to ban POGOs, citing concerns over societal disruption.

“While we await an executive order to formalize the ban's implementation, many government agencies have already begun laying the groundwork,” he said.

Already, the Philippine Amusement and Gaming Corporation (PAGCOR) has taken swift action, revoking the licenses of five out of 46 Internet Gaming Licensees (IGLs) and mandating the termination of all POGO operations by the end of the year.

PAGCOR also conducted inspections of other entities, such as Special Class BPOs (Business Process Outsourcing), to ensure they operate differently from POGOs and that 95 percent of their workforce are Filipinos, hence, excluding them from the POGO ban.

Likewise, the Department of Finance (DOF) has also backed the President’s decision, affirming that the economic and social costs of the POGO industry far outweigh its benefits.

Meanwhile, the Department of Labor and Employment (DOLE) is stepping up to support displaced Filipino workers and help them transition into new employment opportunities. 

Additionally, the Bureau of Immigration (BI) has started downgrading Chinese POGO workers' visas, facilitating their exit from the country, with the cancellation of 9G working visas set for mid-October.

The Philippine Economic Zone Authority (PEZA) is also engaging developers and operators to identify any companies engaged in online gaming within their economic zones.

The POGO industry once occupied a massive 1.3 million square meters of office space particularly in Metro Manila at its peak, representing 10 percent of the total office stock—concentrated largely in Pasay and Parañaque. This led to a spike in rental rates across the board.

However, Curran said the landscape has shifted significantly. “Due to the pandemic and China’s tightening grip on gaming, POGOs now occupy just 350,000 square meters—around 3.5 percent of Metro Manila’s office stock. Major developers have responded by reducing their POGO exposure, limiting it to no more than five percent of their portfolios.”

While POGOs still contributed nine percent of total office transactions in the first half of 2024, the real drivers of demand remain IT-BPM firms and traditional office occupiers, which accounted for 42 percent and 20 percent of the deals, respectively, Curran added.