DEVELOPERS have been advised to slow down the building of office spaces for the business-process outsourcing (BPO) industry by about 30 percent to moderate the risk posed by the Chinese-led Philippine offshore gaming operators (Pogo).
David Leechiu, CEO of Leechiu Property Consultants, said developers should limit building office spaces to 700,000 square meters per year from the current 1 million square meters, a huge chunk of which are just being gobbled up by the Chinese Pogos.
This way, he said, the risk posed by the sudden pullout of the Pogo will be minimized. Pogos usually pay 1.5 years in advance payment and down payment of six months. If a Pogo pulled out immediately, possibly on change of policy, real-estate owners should have ample time to look for a replacement.
Based on the property consultant’s monitoring of the total Philippine office take-up of 1 million square meters, Pogos accounted for 386,000 square meters, or 34 percent of take-up while the IT-BPM sector recorded 355,000 square meters.
In Metro Manila, Pogo take-up was at 375,000 square meters, more than double from the same period last year. Leechiu said Pogos now take up some 12 percent of the entire BPO market in the country, and that there would be a significant impact if they were taken out of the picture.
From just 200,000 square meters before President Duterte assumed office, Pogos now occupy some 1.3 square meters of office space, a growth of more than six times in a span of just three years.
The Pogo industry annually, however, generates $8.3 billion in salaries, now exceeding the IT-BPM industry’s $6.2-billion contribution.
“The Pogo industry is also a notable driver for the residential market which generates an annual housing rental income of $641 million,” Leechiu said.
“Pogos have taken up substantial space in key Metro Manila business districts and other areas since they first established facilities in the country in 2016. Bay City accounts for 502,000 square meters or 36 percent of total Pogo footprint in the country. It is followed by Makati City at 20 percent; Alabang, Cavite and Quezon City,” he said.