Faster PEZA approvals urged amid POGO worries

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THE GOVERNMENT needs to address the bottlenecks in the economic zone accreditation process in anticipation of a possible slowdown in online gaming investment following a crackdown on the industry in China, Colliers International Philippines said.

“The issue that we have right now is we need more PEZA (recognized) space… What the government can do is hasten approvals or make it faster,” Richard T. Raymundo, managing director of Colliers, told BusinessWorld after the firm’s Second Quarter Property Market Briefing on Friday.

He was referring to the Philippine Economic Zone Authority’s (PEZA) accreditation process, which allows developers and locators to qualify for investment incentives. PEZA typically endorses a site for incentives, but the final step is a proclamation of economic zone status by the Office of the President.

Mr. Raymundo estimated that for this year, Metro Manila has about 700,000 square meters (sq. m.) of new office supply due to be built, with about 225,000 sq.m. PEZA-compliant. Of the PEZA-approved space, 163,000 sq.m. is pre-leased, leaving only 62,000 sq.m. in PEZA-approved space remaining.

Ang liit (It’s not enough), so we need more buildings which are completing this year to be PEZA-accredited. That’s how they can help because there is demand. It is still growing,” he added.




He said faster processing is one way to address the possible fall-off in business from the Philippine Online Gaming Operator (POGO) sector, after China signaled a crackdown on cross-border gambling and complained of illegal recruitment and poor work conditions for its nationals in the Philippines.

The Chinese embassy in particular zeroed in on a plan by the gaming regulator to cluster POGO firms in designated hubs that will be “self-contained,” which the embassy said might violate its nationals’ rights.

Mr. Raymundo said that the POGO industry is a “big force” that drives the property market since these companies are about 30% to 35% of the office market while making up a large portion of the foreign take-up in the residential market.

He said he does not expect a “pack up and go” scenario for POGOs in the event of a crackdown, but rather a slowdown in future take-up due to firm contracts already signed.

He said space that may be vacated by departing POGOs can be taken up by other occupiers amid strong growth all over the economy.

“The upside is maybe this is an opportunity for the traditional (office tenants)… to start (occupying) these buildings because there is still demand,” he added.

Colliers reported that deals with traditional and non-outsourcing firms hit 271,000 sq.m. in the first half of 2019, up 22% year-on-year. — Vincent Mariel P. Galang

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