Pogos: New growth driver

Philippine offshore gaming operations, or Pogos, are reshaping the economy, just as the business process outsourcing sector sprang some 20 years ago to become a major source of employment and dollar earner.

The Pogos, according to a property consultant, are now set to become the largest consumer of office spaces in Metro Manila before the end of 2019, overtaking the BPOs. They will also soon become a major revenue source of the government. The state plans to collect at least P24 billion in taxes annually from the foreign workers employed in the offshore gaming operations in the Philippines.

The government plans to collect the taxes starting this month. The initial estimate of P24 billion a year could balloon as data from government agencies showed that about 138,000 foreign workers were now employed in the Pogos.

The revenues to be collected from the Pogo industry were non-existent some four or five years ago, before state-run Philippine Amusement and Gaming Corp. took over control of its operations on orders of President Rodrigo Duterte. The employment data on the Pogos are also revealing. The Bureau of Immigration’s estimate of at least 138,000 workers are boosting consumption in the economy. They are driving the sales of restaurants, malls and bars in Metro Manila and other major urban centers in the Philippines.

The demand for office spaces to meet the requirement of Pogos and the accommodation of foreign workers, meanwhile, is lifting the property sector. Online gaming has been the fastest growing segment in the Philippine office market over the past four years, taking up substantial space in the reclaimed Manila Bay area, Makati and Alabang. The industry has also penetrated Clark, Cavite and Laguna.

The construction sector and major property companies are benefiting from the strong demand for office space from the Pogo sector, which,in turn, is raising the leasing rates of residential condominiums and reservation sales in residential towers.

The economy in general is receiving a boost from Pogos. They are set to increase the government coffers as well, by way of increased income tax collections. The government and private sector, thus, should adapt to the demands of the new growth driver and impose reasonable control over the operations of Pogos.