Demand for office space from online gambling operators has brought the Philippines office market to record heights this year, according to a report by real estate brokerage firm Leechiu Property Consultants.
Philippine offshore gambling operators (POGOs) occupied more than 738,000 square meters of office space this year, Leechiu said Monday.
Peak of gambling-related transactions in the office space market occurred in the second and fourth quarters of the year, driving up overall demand for office space in the Philippines. According to Leechiu, POGO-occupied office spaces have increased 11 times over the past four years.
The real estate specialist noted in its recently released report that POGOs typically opt for “readily-available supply for immediate use”. However, some online gambling operators seem to be willing to wait a few quarters or up to a year for an office amenity that best meets their demands.
Philippine authorities launched the POGO scheme a few years ago. Under said scheme, online gambling operators can be granted licenses for the provision of offshore services from the Philippine gambling regulator, PAGCOR. POGO licensees are not allowed to service local customers.
Influx of Chinese Workers Pushes Up Property Prices in Manila
POGOs mostly target gamblers from Mainland China where the provision of online casino and betting activities is prohibited. Given the fact that Chinese gamblers represent the largest portion of Philippine-licensed operators’ client base, employees at most POGO companies are namely Chinese nationals. According to recent data, the Philippines’ POGO industry employs more than 100,000 people.
The influx of Chinese nationals prompted by the growth of the POGO industry has pushed up property prices in the Philippine capital, according to Leechiu. Earlier this year, the real estate brokerage firm projected that POGOs would overtake call centers in terms of office demand by the end of the year.
In Metro Manila, demand for office space from POGOs more than doubled this year to 608,000 square meters, up from 296,000 square meters in 2018.
Earlier this year, Philippine gambling company Oriental Group announced plans to build two POGO hubs in the country due to the growing demand for office space from locally licensed online gambling operators.
Plans involved a 20-hectare POGO hub in Cavite City with capacity for more than 20,000 workers and a second POGO hub in Clark City, north of Manila, that upon completion of a first phase of development would occupy 10 hectares and would be able to accommodate 5,000 workers.
News about POGOs reigning supreme in the Philippines office space market emerge as country lawmakers are looking to burden online gambling operators with additional taxes. Last month, the Philippine House Committee on Ways and Means approved the implementation of a 5% franchise tax on locally licensed online gambling companies and a 25% tax on the salaries of foreign POGO workers.
Philippine lawmakers have said that the tax measure aim to crack down on tax-dodging online gambling operators.
Source: POGOs dominate Philippine office market in 2019 — Leechiu, PhilStar
Follow us on Facebook and Twitter to stay up to date on the day’s top casino news stories
