Tap digital nomads to make up for Pogo losses

Tap digital nomads to make up for Pogo losses
SunStar Business
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FACILITIES abandoned due to the Philippine Offshore Gaming Operation (Pogo) exit could be repurposed to cater to the growing digital nomads visiting the country.

Emilio Neri Jr., lead economist at BPI, made this suggestion during a recent visit to Cebu. Neri noted that the initial departure of some Pogo firms during the Covid-19 pandemic had already caused office and residential vacancies, and President Ferdinand “Bongbong” Marcos Jr.’s recent decision to completely shift away from this market has further intensified the situation.

“Pogo’s exit already resulted in high vacancy rates in offices and residential, particularly in some parts of the country where online gaming employees worked,” he said.

Neri said there’s a minimal impact of Pogo’s exit on Cebu’s economy as the province has lesser exposure compared to Pampanga, Tarlac and the National Capital Region, among others.

According to KMC Savills chief executive officer Joe Curran, the Pogo industry once occupied a massive 1.3 million square meters of office space in Metro Manila at its peak, representing 10 percent of the total office stock—concentrated largely in Pasay and Parañaque. This led to a spike in rental rates across the board.

However, the landscape has shifted significantly. Due to the pandemic and China’s tightening grip on gaming, Curran said Pogos now occupy just 350,000 square meters—around 3.5 percent of Metro Manila’s office stock. Major developers have responded by reducing their Pogo exposure, limiting it to no more than five percent of their portfolios.

Curran said while Pogos still contributed nine percent of total office transactions in the first half of 2024, the real drivers of demand remain information technology- business process management firms and traditional office occupiers, which accounted for 42 percent and 20 percent of the deals, respectively.

“Though there may be short-term disruptions in select areas of the office market, I believe the long-term impact will be minimal and well-managed,” said Curran.

“In fact, we see an opportunity here: by addressing the concerns surrounding this sector, the Philippines is positioning itself as a more transparent and globally competitive destination for investment. This move could further enhance the country’s appeal to multinational companies seeking to establish or expand their operations,” he said.

Neri said the country needs to find sectors that will make up for the office vacancies.

“Hopefully, we can replace that with sectors related to remote work or the one that’s trending now—digital nomadism,” said Neri.

A digital nomad is someone who works remotely using the internet, allowing them to travel and work from different locations around the world instead of staying in one place.

Neri said the country should prepare for the rise of digital nomadism despite the “back to the office” trend, saying that this new phenomenon can no longer be reversed. He said telco providers like Starlink have been put up even in far-flung areas across the country to provide connectivity to cater to remote workers.

The increase of digital nomads has skyrocketed since 2019, with a staggering 131 percent increase from pre-pandemic levels. The digital nomad lifestyle has transitioned from a niche trend to a mainstream career path with millions of people now embracing it.

The rise of digital nomads has contributed to the growth of the local economy, with these individuals spending billions of dollars on travel, accommodations and local experiences. / KOC

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