Property constancy firm Leechiu Property Consultants, Inc. (LPC) said the complete exit of the remaining Philippine offshore gaming operations (POGO) would exacerbate the constraints placed by the pandemic on the real-estate sector.
David T. Leechiu, LPC chief executive officer, said the full exit of the POGO industry will bring a higher incidence of foreclosures for the office sector as well as drop rental rates in the country.
“A full exit of the POGO industry is expected to not only accumulate further losses in sources of income and tax but also increase office vacancies and push rental rates further down than the pandemic,” Leechiu told reporters in a briefing.
Based on industry data, the cumulated losses of the office space segment already amounted P45 billion since the pandemic began in 2020.
If the government decides to ban POGOs in the country, around 1.05 million square meter additional official space will be vacated by offshore gaming firms, resulting in another P18.9 billion in rental fee losses.
Moreover, Leechiu said around P28.6 billion in annual housing rentals from POGO’s 2.4 million square meter residential space will also be lost from the exit.
Aside from the property sector, other industries, such as utilities, services, and the government, would also feel the pinch from failing POGOs.
Leechiu noted that for electricity alone, a full POGO exit would cost power distribution companies about P9.8 billion in unrealized income.
For the services sector, the estimated loss was at P11.4 billion, representing POGO’s spending on commissary meals. Another P952 million in daily spending will also be incurred.
Contractors for fitting out office buildings would also suffer an estimated annual loss of P52.5 billion, Leechiu said.
For the government, Leechiu said the Philippine Amusement and Gaming Corp. will forego P5.25 billion in regulatory fees, while the Bureau of Internal Revenue (BIR) is poised to lose P5.8 billion in taxes.
In addition, Leechiu said the BIR could no longer collect around P54.3 billion to P57.1 billion in income taxes from foreign POGO employees.
Local employment will also be affected, as about 347,000 Filipino jobs rely on the POGO sector, he said.
“We’re going to get another economic driver, the POGO sector, which is so critical also to the economy, and we’re going to try to shut them down,” Leechiu said. “This is not the time to shut things down. This is the time to increase the momentum of the economy.”
He admitted that illegal POGOs bring in some social ills to the country, “but I think the hardest social ill is joblessness, underemployment and underpaid workers.”
Instead of a total POGO ban, Leechiu suggested that the government should strictly enforce the law .
“Shutdown or process those illegal POGOs to make them legal. Enforce drug enforcement. Don’t allow people to get kidnap, I don’t know how you do that, maybe better technology to secure the population,” he said concluded.
Source: Manila Bulletin