Philippines Could End Up Losing $64m In 2021 Due To POGO Exodus
The Philippines had a thriving gambling industry and Philippine offshore gaming operators (POGOs) made a significant contribution towards the overall gross gaming revenues (GGR). The gambling industry in the Philippines has been devastated due to COVID-19 and the ensuring lockdown.
This has resulted in a mass exodus of POGOs and a result the overall gambling industry has taken a huge financial blow.
Philippine Amusement and Gaming Corp. (PAGCOR), which is the main gaming regulator in the Philippines has confirmed that a total of 28 POGOs have exited the country since March 2020. PAGCOR confirmed that POGOs were responsible for bringing in just over PHP 7 billion in 2019 but that number dropped by nearly 25 percent in 2020 to just PHP 5.2 billion.
This number is going to fall further in 2021 as PAGCOR expects only PHP 3.3 billion to come in which amounts to a loss of $64 million in 2021. If you combine the POGO losses from 2020 and 2021, the Philippines is expected to lose over $100 million.
These losses will hurt the economy of the Philippines as these POGOs are not expected to return to the Philippines. PAGCOR says some of these POGOs have decided to relocate in countries like Vietnam, Cambodia and Laos.
The departure of POGOs have also impacted the property market in the country as POGOs rented out a lot of prime commercial space when they operated in the Philippines. Leechiu Property Consultants Inc. (LPC) state that POGOs are no longer using 875,000 square meters of office space and as a result, the property market is missing out on nearly $2 million each month and over $24 million each year.
Tax Laws Not Attractive For POGOs
POGOs set up base in the Philippines a few years ago when the country had very lenient gaming laws in place. Things changed as President Duterte cracked down on POGOs and recently signed Republic Act 11590 into existence which increases the tax that POGOs pay.
The new law requires POGOs to pay 5 percent of their GGR and also gives gaming regulators like PAGCOR to impose their own regulatory fees on POGOs. POGOs are also required to withhold 25 percent of their foreign employees’ salaries. These new laws have not gone down well with POGOs and could result in even more POGOs exiting the Philippines.