Biz Buzz: Pogos: Nowhere to go but out
How feasible is it to unwind the remaining Philippine offshore gaming operators (Pogos) aka IGLs or internet gaming licensees in this part of the world?
It’s an industry that the Philippine Amusement and Gaming Corp. (Pagcor) is reluctant to let go of, considering the huge contribution to its coffers—P5 billion in 2023 (down from P7 billion in the past year, but this was despite the decline in number of players).
Looking at the latest rules issued by Pagcor in a July 2023 memorandum, the validity of the license, whether original or renewed, shall be for two years.
However, the same memo said: “The license is a permit and a mere privilege and is not a contract between Pagcor and the licensee. Thus, it may be amended, supplemented, and canceled in accordance with the provisions of these rules and regulations and other pertinent laws, ordinances and issuances.”
President Marcos’ unequivocal order to totally ban the industry—given snowballing concerns on scamming, money laundering, human trafficking and other crimes spurred by its proliferation—overrides any possible foot-dragging on its execution.
“All Pagcor needs to do is to issue a memorandum that all licenses will be deemed withdrawn and canceled effective a certain date,” a lawyer knowledgeable about the Pogo industry told Biz Buzz.
Note that we are not the first jurisdiction to weed out online gaming. After experiencing a similar boom but also the corollary crimes and other social ills, Cambodia banned online gaming in 2019. So did Macau in 2022.Are these Pogos entitled to claim damages if their licenses would be revoked early?
“There’s no such thing. They took the risk when they applied, knowing it’s a privilege not a right,” said the same Pogo legal expert. —Doris Dumlao-Abadilla
Meanwhile …
Now that the IGL inclusion has been clarified, one major point of contention, according to property consulting firm Colliers, is whether the ban also covers back offices that support gaming located within special economic zones, such as those of the Philippine Economic Zone Authority and Cagayan Economic Zone Authority that are not under the jurisdiction of Pagcor and have been operating even before then President Duterte welcomed the creation of Pogos.
Until the implementing rules and regulations of the Pogo ban are released, Colliers expects that Pogo occupiers will take a wait-and-see stance.
To ensure the effective implementation of the total ban, Colliers said concerned government agencies, such as the Department of Interior and Local Government and Pagcor, must coordinate in crafting the implementing rules.
As it is today, Colliers cited ambiguity on how the ban will be implemented. Will it be through an executive order, a law to be passed by Congress or just a Pagcor order?
Ahead of President Marcos’ directive, Colliers noted that Pasig City had already banned Pogos by issuing an ordinance in December 2022 that did not renew the business permits of existing players and prevented the entry of new ones. Such is a “simple and effective template” to execute the ban, Colliers said.
At the peak of Pogo demand in 2019, Colliers estimated that the sector had occupied nearly 1.3 million square meters or about 10 percent of total office space in Metro Manila. Following the pandemic lockdowns and regulatory tightening, Colliers estimated that they now occupy just about 500,000 square meters or 3.5 percent of office stock in the metropolis. At the most, major developers now only have 5-percent Pogo exposure, Colliers said.
While this will still impact the office market, Colliers takes heart from the fact that the exposure of major developers has gone down to a “negligible” level, “while other demand drivers like the IT-BPM companies; traditional, local, and multinational companies; and government agencies continue to take up office spaces.” —Doris Dumlao-Abadilla
Benitez nominated to lead Tesda
The industry-led Philippine Business for Education (PBEd) has endorsed Negros Occidental 3rd district representative Jose Francisco “Kiko” Benitez to be the new head of the Technical Education and Skills Development Authority (Tesda.
The education reforms advocacy group, composed of the country’s top private sector executives, cited his wide range of experience, which they find suitable for the director general position at Tesda.
“With decades of experience as a legislator, educator, and university president, we are confident in his ability to fulfill Tesda’s mandate of providing quality and relevant skills training that will boost Filipinos’ employability,” the group said in a letter to President Marcos dated July 24.
“He is also one of the first proponents of the Second Congressional Commission on Education (EDCOM 2), where he has shown unwavering commitment for education reform,” the PBED added.
Most importantly, the organization highlighted his role as vice chair of the House of Representatives’ special committee on creative industries, reasoning that he can provide insights into improving the competencies of technical vocational learners.
Further, the PBED also said they see Benitez and recently appointed education secretary Juan Edgardo “Sonny” Angara working well together.
“Given their active roles as commissioners in the EDCOM 2 and their strong working relationships, Congressman Benitez and Secretary Angara are well-positioned to ensure alignment between our country’s vision for education and employability,” said PBed. — Alden M. Monzon
