Real estate market braces for impact from POGO closures

Jade Denosta July 25, 2024

SiGMA news

Real estate market braces for impact from POGO closures

The closure of POGOs is expected to have a massive impact on the real estate sector, as the industry was a major tenant of office spaces according to Reuters.

PAGCOR will be working closely with law enforcement agencies to prevent POGOs from operating illegally and to address concerns about human trafficking and other crimes associated with the industry.

The Philippine government is set to completely phase out the offshore gaming industry, with a focus on Chinese-owned operators, according to a statement from the Philippine Amusement and Gaming Corporation (PAGCOR) on Tuesday.

President Ferdinand Marcos Jr. has ordered the regulator to shut down Philippine Offshore Gaming Operators (POGOs) by the end of the year amid concerns over their alleged links to criminal activities. “No problem in closing down POGOs because I can invoke national security and the president’s order,” PAGCOR Chairman Alejandro Tengco told Reuters.

The once-booming industry, which took off in 2016 due to lenient regulations, has recently faced increasing scrutiny. There were 300 POGO operators at its peak, but stricter tax rules and the COVID-19 pandemic forced many to close or relocate. According to Chairman Tengco, there’s only 43 licensed POGOs in the Philippines, employing approximately 63,000 workers.

Other pros and cons

While the government stands to lose around 23 billion pesos (approximately €362 million) annually in taxes and fees from the industry, Economic Planning Secretary Arsenio Balisacan (pictured above) argued that the benefits of a ban outweigh the costs.

China, which has been vocal about its opposition to cross-border gambling, is seen as a potential beneficiary of the crackdown. Some analysts believe the move could help ease tensions between the two countries over the disputed South China Sea.

“This might lead to an improvement in Philippine and China relations,” said Renato Cruz De Castro, an international affairs analyst at De La Salle University.