Property companies limiting exposure to POGOs

MANILA, Philippines — Some of the country’s property giants are taking extra measures in relation to their exposure to the offshore gaming industry amid China’s crackdown on this fast growing but controversial sector. 

DoubleDragon Properties Corp., the listed property developer co-chaired by Mang Inasal founder Edgar “Injap” Sia II and Jollibee founder Tony Tan Caktiong is one such player. 

In an interview, Sia said that while the company’s DD Meridian Park is host to many Philippine offshore gaming operators (POGOs), DoubleDragon has put in place protective measures in case the landscape changes.

“The lease contract is locked for one year,” he said. He also said that the lease rates are significantly higher to take into account whatever risks that can possibly arise from the new industry. 

DD Meridian is a 4.75-hectare prime office and commercial block in the Bay Area, which is one of Metro Manila’s biggest POGO districts. It will provide 280,000 square meters of leasable space by 2020. 

Ayala Land Inc., the property giant of conglomerate Ayala Corp., for its part, said it would limit to only 10 percent of its gross leasable portfolio its exposure to POGOs.

Ayala Land Inc. commercial business group head Jose Emmanuel Jalandoni said that at present POGOs account for less than 10 percent of ALI’s leasable office portfolio. 

Thus, the company’s vulnerability in relation to the controversial industry is limited, officials said.

The Villar Group’s Vista Land & Lifescapes Inc. also gave assurance that the company’s exposure to the offshore gaming industry is limited. 

“Our leasable spaces are mostly retail malls which limits our POGO exposure to about two percent of the company’s overall leasing portfolio. In terms of our residential business, we launched projects with an estimated value of P16 billion during the first semester, most of which were low and affordable and outside Metro Manila,” said Vista Land president and CEO Manuel Paolo Villar.

Last week, the Chinese government raised concerns on huge amounts of Chinese funds supposedly flowing into the Philippines through offshore gaming, adding that any form of gambling targeting Chinese citizens is illegal.

In its statement, the Chinese Embassy said offshore gaming companies and other forms of gambling entities targeting Chinese customers have severely affected the Chinese side in many aspects and are potentially breaking Chinese laws as it stressed that it is illegal to lure Chinese customers into gambling.

“First, huge amount of Chinese funds has illegally flown out of China and illegally into the Philippines, involving crimes such as cross-border money laundering through underground banking, which undermines China’s financial supervision and financial security,” it said.

Such illegal money are flowing into the Philippine real estate industry and other sectors, it also said.

According to the Chinese laws and regulations, any form of gambling by Chinese citizens, including online-gambling,  gambling overseas, opening casinos overseas to attract citizens of China as primary customers, is illegal. 

“The casinos and offshore gaming operators (POGOs) and other forms of gambling entities in the Philippines target Chinese citizens as their primary customers. A large number of Chinese citizens have been illegally recruited and hired in the Philippine gambling industry,” it said. 

POGOs are offshore gaming firms that facilitate online gaming via the internet. They use networks and software exclusively for authorized players outside the Philippines — mostly in China, but possibly in other countries as well.

PAGCOR, the gaming regulator, introduced the POGO landscape in 2016.