POGOs started winding down operations after Marcos ban —property firm

Philippine Offshore Gaming Operators (POGOs) have started to wind down operations with 53,000 square meters (sq.m.) of office space left by the sector in the third quarter, according to Leechiu Property Consultants (LPC).

According to LPC commercial leasing director Mikko Barranda, the sector has already been vacating space in the past four years and now only takes up 500,000 sq.m. versus the peak of 1.7 million sq.m. in 2019.

“The POGO sector has begun to downsize in the third quarter of 2024 after not experiencing any contraction in the second quarter of 2024,” LPC said in a presentation, with 21,000 sq.m. contracted in the first quarter of the year.

The sector recorded demand of 75,000 sq.m. in the first three quarters of the year, a decline from the 185,000 sq.m. for the full-year 2023, and the 61,000 sq.m. in 2022.

“In the last four years, they’ve actually already given up space in a consistent manner,” Barranda told reporters.

“Whether they will give up more in the coming months, I think it’s just for us to wait and see how that will progress given the deadlines that have been set by the government,” he added.

This comes as President Ferdinand “Bongbong” Marcos Jr., in his State of the Nation Address (SONA) in July, ordered the ban on all POGOs by the end of the year, citing the sector’s “grave abuse” and “disrespect” to the country’s system and laws.

Majority or some 70% of the remaining POGOs in the country are mainly located in the Bay Area in Pasay City, while the remaining 30% are scattered across Metro Manila.

Barranda said the industry has only contributed 8% of year-to-date leasing activity, and has not been a major contributor to demand since 2020, after accounting for 45% of total demand prior to the COVID-19 pandemic.

“Given that they’ve shed and contracted already in the last four years as opposed to the impact it could have had if they would have given everything all at one from the pronouncement, we’re convinced that the market is stable and can hold,” he said.

“I think the reassurance we have made in terms of their exposure, in terms of footprint, is it’s not as much as it was back in its heyday back in 2018, 2019,” said Barranda.

Total office space demand for the first nine months of the year stood at 900,000 sq.m., which includes 703,000 sq.m. in Metro Manila, and 197,000 sq.m. in provincial areas.

Broken down per quarter, demand was reported at 331,000 sq.m. in the first three months, 354,000 sq.m. in the second, and 215,000 sq.m. in the third.

Broken down, the third-quarter demand was made up of 454,000 sq.m. from the traditional sector, 371,000 sq.m. from the information technology-business process management (IT-BPM) sector, and 75,000 sq.m. from POGOs. —KG, GMA Integrated News