POGO crackdown and coronavirus may impact office demand

China’s POGO worker crackdown coupled with coronavirus fears will likely dampen office space demand in the Philippines this year, according to local property experts.  

The POGO industry, which employs thousands of Chinese employees has become the subject of an increased crackdown from mainland China. 

Earlier this week, it was reported that China had canceled the passports of thousands of POGO workers who they believe are involved in illegal gambling and fraud. 

The COVID-19 virus has also led to labor and travel issues – both of which will impact office take-up. 

“Landlords may become reluctant to accommodate new (POGO) tenants within their buildings due to health concerns. Similarly, we may likely see a dip in residential sales and leasing as the Chinese market is one of the major drivers in recent years,” said LL Philippines, Inc. Research Head Janlo de los Reyes in an email to Business World. 

Colliers International Philippines Senior Research Manager Joey Roi H. Bondoc said that while POGO firms continue to pre-lease office space, there will be challenges in manning these operations with Chinese employees. 

“Operators are looking for employees outside Mainland China. And they plan to fit out once the new office towers are completed,” he added.

Should POGO firms not take up additional office space this year, vacancy rates in Metro Manila may rise up to 7.6 percent, up from 4.9 percent in 2019, said the property experts.