What are POGOs?
POGOs refer to entities that engage in offering sports betting and online gaming services to foreign nationals that are mostly Chinese. Female live dealers facilitate the games, and winning players get a generous sum of money. The acronym, which was coined by the Philippine Amusement and Gaming Corporation (PAGCOR), stands for Philippine Offshore Gaming Operators (POGOs), which they also regulate. They decided to set up their business in the Philippines because online gambling is illegal in China.
Ironically, while these entities operate in the Philippines, rules set by the PAGCOR state that foreigners in the country and Filipinos residing abroad are not allowed to partake in online gambling to protect gullible minors from these types of activities, and shielding the Filipino people from exploitation as well.
The Good and The Bad
Just like with anything else, there are advantages and disadvantages to the entry of these operators in the country. Let us start with the good ones. POGOs are essentially responsible for driving the property market in the Philippines. The high demand for residential, commercial, and hotel spaces are brought about by the mainland Chinese seeking for dwellings in the country since they are working for POGOs.
Chinese occupants dominate the residential condominium sector in the Manila Bay Area
In a March 2018 report prepared by Leechiu Property Consultants, it was mentioned that the Chinese have replaced the Overseas Filipino Workers (OFWs) as the largest property buyers in the Philippines, and this is most true for the Manila Bay area, where at least 70% of condominium occupants are mainland Chinese. Also, the country and PAGCOR benefit from these operators, through the income tax as well as the application, bond, and processing fees, respectively. Just this August 2019, the Bureau of Internal Revenue (BIR) reported collecting around 200 million pesos worth of taxes from six POGO companies. The food and hospitality industries also benefit from these POGOs since the migration of foreign workers would mean more customers for both restaurants and hotels. If there is one thing we can derive from this part, it is that real estate-wise, POGOs are advantageous.
POGOs and the Local Property Market
Let’s take a look at how the POGO industry has helped the local property market so far:
- Residential & Commercial | Colliers International reports that the residential and commercial condominium markets remain strong because of the proliferation of Chinese brought about by the gaming firms in the country.
- Hospitality | Despite the delivery of new rooms, there is a 70% hotel occupancy projection in the years 2019 to 2020, due to the continued rise in foreign tourists. Average daily rates are also expected to grow by an average of 3% yearly for the same years.
- Industrial | The industrial segment also benefits from offshore gaming companies from China. The country’s first Philippine-China industrial park, which Ayala Land will be putting up in Porac, Pampanga, was driven from the rising interest in warehouses of Chinese manufacturers who also plan to do business in the Philippines.
The other side of the coin
Our unawareness of the employees’ real working conditions in the back-end offices, the efficacy of applied national security measures, POGOs’ compliance with the given rules, and the government’s control over illegal operators, are some of the things, among others, that we need to consider. While these companies generate massive revenue each month, the country also loses billions from unregistered operators not fulfilling their tax obligations. There is the likelihood of losing more than gaining in the long run, most especially if these companies decide to stop their operations in the country too.
The billion-dollar offshore gaming industry is expected to generate 8 billion for the Philippines in 2019, but at the same time, it is also a threat. Looking at the larger picture, the POGO island currently being developed in Cavite could start what many fear to be the onset of Chinese colonization, as we are looking at the migration of at least 20,000 Chinese workers upon its opening. There is also the issue of the government’s lenient monitoring of foreign workers entering the country. According to the Department of Labor and Employment (DOLE), almost 8,000 foreigners have jobs at online gambling firms without the proper alien employment permits. If the government will not address the issue early on, this might pose problems in the future. Lastly, since there are POGO centers situated near military bases (such as those located near the Armed Forces of the Philippines, the Villamor Airbase, and the naval base of Sangley Point), we cannot dismiss the possibility of espionage that present security threats.
It is safe to say that the local economy is reaping so much from these gaming operators, and there is no doubt it is making our real estate industry vibrant. But the question is, are we high rollers playing our cards right? Or is it just beginner’s luck?
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