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POGO demand brings Philippine office space take up to record high in 2019

Demand from Philippine Offshore Gaming Operators (POGO) lifted the country’s office space take up to a record high in 2019, data released by Leechiu Property Consultants (LPC) on Monday showed.

Office space take up hit a record high of 1.7 million square meters this year, LPC chief executive officer David Leechiu said in a press conference.

Most of the demand came from POGOs, which accounted for 738,000 square meters of which 296,000 sqm were in Metro Manila—primarily in the Bay Area.

“We also see more demand from POGOs because the aggressiveness, the amount of business that wants to operate here in the Philippines, is growing more and more,” Leechiu told reporters in Makati City.

The Philippine Amusement and Gaming Corporation (PAGCOR) stopped accepting applications for offshore gaming licenses in August, until all regulatory concerns have been addressed.

Several lawmakers are seeking an investigation into the effects of POGOs on the local economy, national security, and the public at large amid issues on revenue monitoring and the entry of foreigners without valid work permits supposedly working for offshore gaming operations.

PAGCOR has proposed to transfer Chinese online gambling workers to self-contained communities or hubs, prompting apprehension from the Chinese Embassy that the move may infringe on Chinese citizens’ rights.

The Bay Area continues to be the main location for POGO operators with 657,000 square meters of office space occupied so far, given its proximity to the Ninoy Aquino International Airport.

POGO operators also took space in Makati City (292,000 sqm), Alabang (137,000 sqm), and Ortigas (120,000 sqm).

Outside of Metro Manila, POGO operators have expanded to Clark (140,000 sqm), Cavite (146,000 sqm), and Laguna (65,000 sqm).

The Information Technology and Business Process Management (IT-BPM) sector, is the second highest occupier of office, accounting for 573,000 sqm, a 14% decline, with 428,000 square meters located in Metro Manila.

“Lack of PEZA supply is likely to make the Philippines a less attractive hub for IT-BPM firms on expansion mode,” Leechiu said.

PEZA is the Philippine Economic Zone Authority.

“We need more PEZA-accredited buildings in the pipeline if we want the country to continue being an ideal location for these companies,” Leechiu noted.

President Rodrigo Duterte passed Administrative Order 18 in June, placing a moratorium on processing of applications for economic zones in Metro Manila.

Most BPO firms are expected to expand operations in Clark, where a number of international businesses have set up shop, Leechiu said.

“Clark is the new frontier. A number of factors have conspired to make it so,” he said.

“These are the combination of international access, better connections to Metro Manila via rail and other new roads in addition to existing tax incentives and massive amount of available talent,” he added. —VDS, GMA News