By DERCO ROSAL
The offshore gaming ban, while controversial, has not led to the anticipated job losses. Despite concerns about the economic consequences, analysis shows that the industry's contribution to employment was relatively small.
According to the Bank of the Philippine Islands (BPI), the recently banned Philippine offshore gaming operations (POGO) did not contribute to employment even during their peak operations in 2019.
“The POGOs did not really help generate that much employment during the POGO height,” BPI Senior Vice President and Lead Economist Emilio S. Neri Jr. said during the recent BPI’s economic review and forecast event.
“Unemployment rates did not go down as low as they are today,” Neri added.
In August, data from the Philippine Statistics Authority (PSA) showed the labor market remained strong, with the unemployment rate dropping to 4.0 percent, down from 4.7 percent in July and 4.4 percent in August 2023.
In July 2024, President Ferdinand Marcos Jr. announced an official ban on POGO operations, directing Philippine Amusement and Gaming Corporation (Pagcor) to cease their operations by year’s end.
Around 27,000 workers are reported to lose their jobs due to the POGO ban by the end of December.
POGO ban on post-pandemic economy
While the pandemic created new opportunities, challenges remain, including the shift to remote work and the decline of POGO operations, Neri said.
Neri expects the midterm election spending and public construction—already 70 percent above pre-pandemic levels—to boost economic growth next year, but he emphasized that more private sector recovery and projects are needed for full rebound.
“It’s really tourism now, no longer online gaming, because we need to attract very competitive pricing so that we can compete with Thailand and many others using best practices in the region,” Neri asserted.
The construction sector faces major challenges, as workers find it hard to transition to online jobs, leaving many unemployed or underemployed without the replacement of POGOs.
According to Neri, repurposing POGO condominiums into business process outsourcing (BPOs) and enhancing their sustainability with eco-friendly materials and solar power could increase demand in the market.
On the other hand, while repurposing these properties is a possibility, it will be challenging to implement quickly if prices remain high, as office spaces need significant reconfiguration to suit BPO operations.
As clarified, the president's decision to ban POGOs is a government policy choice unrelated to interest rates.
Many operators had already exited during the pandemic in 2021, which “explains a good portion of why private construction is weak.”
The shift to remote work has significantly reduced the demand for traditional office spaces, leading to weakened construction activity for new offices.
Office construction activity has declined regardless of changes in BSP interest rates.
“That was bound to happen because of remote work,” Neri said, stressing further stressing its inevitability.
Vacancy rates
“The recovery of private sector consumption has been slow in general,” Neri said.
“Currently, it’s 20 percent below the pre-pandemic level, and we can attribute this to the challenges affecting the real estate sector.”
Office vacancy rates, Neri explained, have risen due to more work-from-home setups, while the pandemic has reduced demand for residential properties, particularly in the middle and lower segments.
“As a result, real estate companies have been less aggressive in constructing new projects.”
“The monetary easing of the BSP might be able to help in the recovery of investment spending, specifically private sector construction,” BPI stated.