DECONGESTING Metro Manila could also mean regulating where Philippine offshore gaming operators (Pogos) locate, according to the National Economic and Development Authority (Neda).
At the Economic Journalists Association of the Philippines (Ejap) Forum on Tuesday, Socioeconomic Planning Secretary Ernesto M. Pernia noted an “overbuilding” of offices and condominiums in Metro Manila.
Pernia said these Pogos can instead locate in places outside of the National Capital Region (NCR) or Metro Manila to operate. He said the government can encourage them to do this through regulation.
“I think there is too much overbuilding of offices and condominiums in Metro Manila. They should go to the regions because infrastructure is being improved and that will improve the performance of our regions,” Pernia said. “I think Pogos should be regulated in the fashion of where they can locate.”
While there are no exact figures and no official study made on Pogos, local economists list them among the factors driving up the uptake in real-estate prices and spaces in the country.
Pogos need spaces for their business and residential units for foreign workers. This is especially crucial with the plateau of the business-process outsourcing (BPO) industry in recent years.
Bank of the Philippine Islands (BPI) lead economist Emilio S. Neri Jr. told the BusinessMirror at the sidelines of the Ejap Forum that the Pogos filled the gap left by the slowdown in the growth of the BPOs.
If the Pogos will no longer be allowed in the country, Neri said the Philippine real-estate sector may suffer a “double” loss. Nonetheless, Neri said the real-estate sector is “resilient enough” and can withstand this blow.
Pagcor freeze
Last week, Philippine Amusement and Gaming Corp. (Pagcor) Chairman and Chief Executive Officer (CEO) Andrea Domingo said they are imposing a moratorium on new applications by Pogo players, which will last until the end of the year.
Domingo said, however, that freezing the issuance of new licenses will give Pagcor time to take stock of the situation of Pogos and what policies can be crafted moving forward.
“But if they’re really going away, then we can’t do anything about it and there will have to be some adjustments in the sector of course, [but] I think real estate is resilient enough. The Philippines is a huge economy, I mean as long as we get our acts together, demand for property will remain relatively robust,” Neri said.
For his part, ING Vice President and Senior Economist Nicholas Antonio T. Mapa told the BusinessMirror Pogos are partly to blame for high real estate prices.
Mapa said they can push up real estate prices due to their “quite substantial” office and residential rental needs. With this, real estate prices are “a bit inflated.”
“With the floors they rent out, they’re quite substantial sometimes they buy or they rent. If the company itself will rent out units in different areas for their housing, that’s also helping support [the real-estate sector],” Mapa said.
Significant contribution
Earlier, Ateneo Center for Economic Research and Development
Director
Alvin Ang warned that the country’s real-estate industry may be overly reliant
on the Pogo locators and foreign workers for their business activities. He
cited reports from Colliers International showing demand of Pogo firms for real
estate shot up 37 percent for the first half of the year.
Domingo also said last week the Pogos’ contribution to government revenues and the overall economy is significant.
She said that in the past two years, the government has licensed 49 operators and 200 service providers. From these firms, she said, Pagcor 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 collected 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 (VAT) 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 is optimistic it is on track to meet its P8-billion revenue target from Pogos this year and the P9 billion to P10 billion target next year.
Image credits: Nonie Reyes