Financial professionals told Asia Gaming Briefing that the POGO ban announced in the Philippines will be fully implemented by the end of this year and is expected to have the most direct impact on the Philippine real estate industry.
In a major move, Philippine President Ferdinand Marcos Jr. announced in his third State of the Nation address that Philippine Offshore Gaming Operators (POGOs) will be immediately banned and cease operations by December 31.
The decision comes amid the country’s growing gaming industry, which currently includes more than 40 licensed offshore gaming operators and dozens of illegal gambling centers, according to the Philippine Amusement and Gaming Corporation (PAGCOR) .
Juan Paolo Colet, managing director of Bank of China Capital, pointed out that while the POGO ban is unlikely to have a major impact on the overall stock market, its short-term impact will be most obvious in the real estate industry, causing some listed real estate companies to suffer. to sell off.
Colet told AGB: "It is important to remember that all major real estate players have restricted investment in POGOs, so any loss of rental income should not have a material impact on their earnings prospects or long-term prospects."
However, he warned that the market will need to absorb additional supply of office space and residential units from POGO tenants, which could lead to oversupply and put downward pressure on property rents and prices in areas with higher POGO risk.
OmniPay President and CEO Simoun Ung offered a different perspective on the economic impact of the POGO ban, with real estate being one of the many sectors affected.
For Ung, the economic impact of the POGO ban should be "clearly negative," resulting in "unemployment of POGO employees, reduced demand for businesses that cater to POGOs, from landlords to restaurants," and increased vacancies, especially among those who have not yet recovered from the pandemic. Offices recovering from lockdown. Additionally, tax revenue from POGO operations is expected to decrease.
"In the long term, the costs associated with POGO operations, including increased crime, corruption and other social ills, may outweigh the short-term economic benefits," Ung said. This was the government's rationale in the announcement. Nonetheless, I have reservations opinion, because the issue is more complex.”
Ung noted that land-based casinos would not be affected by the ban, but he argued that "the social costs of increased gambling-related crime, corruption and other social ills" would still exist.
