By Cai U. Ordinario & Bernadette D. Nicolas
THE top official of the Philippine Amusement and Gaming Corp. (Pagcor) believes the property sector would be affected by the gaming regulator’s moratorium on the issuance of licenses to new Philippine Offshore Gaming Operators (POGOs).
In a news briefing, Pagcor Chairman and CEO Andrea Domingo said the moratorium, which will last until the end of the year, will also likely affect negatively the state-owned licensor’s gross gaming revenues (GGR) and funding of government programs.
The Pagcor is considered the country’s largest contributor of revenue to the government after the Bureau of Internal Revenue and the Bureau of Customs.
According to Domingo, the moratorium will have a negative impact on real-estate firms who disclosed that if POGOs stop, 15 percent of the total space they offer will be left unoccupied.
Last week, Ateneo Center for Economic Research and Development Director Alvin P. Ang warned on Thursday that the country’s real-estate industry may be overly reliant on the locators and foreign workers of the Pogo for their business activities.
Ang cited reports from Colliers International that showed POGOs’ demand for real estate shot up 37 percent for the first half of the year.
Domingo said she thinks the void left by call centers that were negatively affected by the reversal in the outsourcing policy of the US, was filled in by POGOs.
“They rescued the real-estate industry,” Domingo said. “If they [didn’t, the property sector] would have been 10 percent to 15 percent down already. Now, they are fully occupied.”
Year’s last
HOWEVER, Domingo said imposing a moratorium on the issuance of new licenses will also give Pagcor time to take stock of the situation of POGOs and what policies can be crafted moving forward.
“We expect to have a little bit of a problem because of this [moratorium],” Domingo told reporters on the sidelines of Monday’s news briefing. “[The GGR] may not grow; it might become stable but [it may also become] very volatile.”
Domingo said the number of Pagcor-licensed POGOs could reach 61 by year-end. To date, there are 58 POGOs operating and three more are expected to be approved.
The three POGO applications, which Domingo said may or may not be approved before the end of the year, would be the last for 2019 as Pagcor started about two to three weeks ago to review its policies on POGOs.
“We should be able to come up with a viable and good program. If we need to change policies, if we have to amend operating procedures, we will be ready to have that by the end of the year,” she said. “So we are not accepting anymore for this year.”
Domingo said another negative implication of the moratorium and the lower revenues could be “disastrous to the UHC [Universal Health Care],” one of the many government programs the gaming regulator supports.
She explained that the contribution of POGOs in government revenues and the overall economy is significant.
That’s it
DOMINGO said that in the past two years, the government has licensed 49 operators and 200 service providers. From these firms, she said, Pagcor already earned P11.9 billion.
This year, Domingo said, there are already 58 operators and 214 service providers. To date, Domingo said Pagcor earned less than P4 billion.
On top of these, she said the government has been able to collect P2 billion in income taxes from POGOs every month. Domingo said the Bureau of Internal Revenue (BIR) has been able to collect P1.25 billion in value-added tax from the expenditures made by Pogo workers.
Domingo said real-estate developers may be earning at least P20 billion a year on lease alone. She expects that real-estate firms may earn P8 billion in lease this year on top of the P12 billion in the past two years.
She said Pagcor remains optimistic that it is on track to meet its P8-billion revenue target through POGOs this year and the P9 billion to P10 billion target next year.
“We see a normal growth for next year like 5 percent to 10 percent. But depending on our study, if we find that the market for POGOs is already saturated; that’s it,” Domingo said.
Palace respect
MEANWHILE, Malacañang said it respects Pagcor’s decision to suspend acceptance of applications for new offshore gambling firms in order to look at other concerns that have not met comfortably.
“Until the President reverses the stand of Pagcor, that remains to be the policy because the President respects heads of departments and offices to do their duty and undertaking,” Salvador S. Panelo, President Duterte’s spokesman, said.
Pagcor’s move came after it called for stricter measures in allowing foreign nationals to enter and work in the country. The Chinese Embassy has also urged the Philippine government to punish those behind the alleged illegal recruitment of Chinese nationals in Philippine casinos, POGOs and other forms of gambling entities.