Is urban Philippine real estate on the verge of change once more? Back in 2018 and 2019, taking a stroll around a city like Metro Manila meant seeing a variety of foreign businesses which Filipinos hardly entered, unless one was part of its staff of course. Spas, nail salons, barber shops, hotpot restaurants, and more: these were the signs of a transformed property market that until quite recently was dominated by BPOs and the retail establishments that cater to its employees. Yet seemingly all of a sudden, POGOs, or Philippine Offshore Gaming Operators had sprung onto the scene, which serviced various online gambling platforms that had a predominantly Mainland Chinese clientele.
This brought over thousands of workers into the country, which while mostly legal and sanctioned by the government-owned Philippine Amusement and Gaming Corporation (PAGCOR), has also courted plenty of controversy. Yet now, the tide seems to be changing again, as the Philippine and even Chinese governments have raised their concerns towards a variety of issues, from tax irregularities, to inflated rental prices, and security amid the rise of crime involving POGO employees.
The result? The Philippines has begun a crackdown on the industry, casting doubt on its long-term profitability, deporting around 40,000 employees, and shutting down 175 POGOs – a move also supported by the Chinese government, and could pave the way for an exit and even a total POGO ban altogether. How can investors like you then take advantage of this changing economic situation? As this projected exodus leaves more space for Pinoy investors and business owners, we’ve enumerated some opportunities you could stand to benefit from in what is shaping up to be the Philippines’ post-POGO era.
1. Lower Rent Caused By Increased Vacancies
While some real estate developers have sounded the alarm on the supposed POGO exit due to projected vacancies (up to 29%, according to online stockbroker platform Colfinancial.com) and lower rent as a result. Indeed, this may prove to be a disadvantage in the short term, but the decrease in leasing rates could be beneficial for companies looking for office spaces in prime business districts, and potential residents looking to live near them. This contradicts what was the status quo just a few years ago, with the emergence of POGOs exponentially increasing commercial and residential rental rates, to a point that many local businesses and tenants have been priced out.
This is why now might be a good time to seek a unit or office space in the CBD while it’s still affordable.
2. An Increased Sense of Safety
The rise of POGOs in the Philippines also triggered security concerns among Filipino residents and investors. Just read the news and you might see headlines here and there of POGO-related crimes, which could deter you and others who might otherwise want to live, work, and set up shop in the areas these POGOs are located. As the government begins to probe and crack down on these questionable activities however, expect to see less hesitation among these stakeholders. This increased sense of safety will easily make your property or business more marketable and potentially drive more leads and foot traffic as a result.
3. In Come the BPOs, Retailers, and Hotels
From the depths of the COVID-19 pandemic, the Philippine economy is rebounding, and is expected to even tide over the looming global recession. According to Finance Secretary Benjamin Diokno, the Philippines is unlikely to go into recession, as supported by its young population and domestic-driven economy. Just look around and you’ll see that commercial activity has become livelier than ever too, with malls and restaurants packed with diners and shoppers (there’s even a possibility of business going back to pre-pandemic levels at the end of this year as per some estimates). Add the resumption of international travel and there will be plenty of opportunities to reap this coming year. For the still-recovering real estate industry, all of these spell good news, as other businesses like retailers, restaurants, and hotels on top of BPOs could make up for the possible exit of POGOs. Indeed, while their exodus could bring about short term pains, it would be best for investors to consider the changing market landscape that’s unfolding. Who knows, its rewards (in the form of a stronger domestic and tourist-driven market) might be even sweeter.
Get In Touch With A Partner That Can Create An Effective Marketing Strategy For the Post-POGO Era.
With the expected changes for the online gambling industry in the Philippines, get your real estate company a trusted marketing partner that can help you thrive during and beyond the era of POGOs. Talk to Numedia Virtual, which provides search engine optimization, pay-per-click, 3D virtual reality, and other services which can propel you to a larger audience eager to check out your real estate offerings.
Inquire with Numedia Virtual now and let’s begin your real estate digital marketing roadmap for 2023 and beyond!