Research group and think tank Global Source believes that now is the best time to put an end to Philippine Offshore Gaming Operators (POGO) firms, citing a potential economic “vulnerability” and “damages.”
“While it is true that POGOs could help cushion the economy against current strong external headwinds, we would rather argue that allowing these to continue and climb back up to its pre-pandemic size would only increase the economy’s vulnerability to a sudden and massive pullout,” Global Source said in a report.
In other words, should the economy grow its dependency on POGOs, it becomes vulnerable should such firms decide to exit the Philippines, especially with China’s policy making gambling illegal. The POGO industry’s conditions aren’t faring well either, with its industry shrinking by 20 percent from the beginning of the COVID-19 pandemic.
Global Source also mentioned that there was a “current upheaval in global financial markets”, as other countries are figuring out how to manage the outflow of money. Countries keep foreign currency reserves in an attempt to stabilize the foreign exchange rate.
“Given this, we think that now may be the best time to pull the plug on Pogos,” they said. “We think the risk of a system-wide property sector collapse and/or banking sector stress is manageable since most firms and banks have deliberately limited exposures to the sector and the decline in real estate prices would help the country be more competitive in attracting a bigger slice of the expanding global BPO (business process outsourcing) market.”
But according to David Leechiu, CEO of Leechiu Property Consultants, a POGO industry pullout will cost the Philippines P952 million a day, based on the spending average of P4,000 per head. Shutting down POGOs entail a domino effect on the real estate market, with P18.9 billion lost for office rentals, P28.6 billion for residential spaces of workers, P9.5 billion in utilities, P54.3 billion in income tax, P52.5 billion for fit-out costs, and P11.4 billion in meals.
Mark Ernest Famatigan is a news writer who focuses on Philippine politics. He is an advocate for press freedom and regularly follows developments in the Philippine economy. The views expressed are his own.
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