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Market Intelligence | Philippines September 20, 2021

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This week, our research team provides insights on the current state of the POGO industry; SM Hotels and Conventions Corp. to open the first Lanson Place-branded hotel in the Philippines; and the Philippine Retailers Association urges the government to intensify vaccine rollout.

POGOs flee for Cambodia, Vietnam, Laos, PAGCOR says
NEWS

The Philippine Amusement and Gaming Corporation (PAGCOR) said that Philippine Offshore Gaming Operators (POGOs) continue to cease operations in the country due to increased taxes and have now transferred to Cambodia, Vietnam, and Laos. PAGCOR added that revenue from POGOs only reached PHP1.6 billion in H1 2021, significantly lower than the PHP8 to PHP9 billion in revenue that they receive on an annual basis. PAGCOR Chair Andrea Domingo said that they only expect revenues from POGOs in 2021 to reach PHP4 billion.

RESEARCH VIEW

As of the end of Q2 2021, office vacancy across Metro Manila reached 12.7%, up from the 11% in Q1 2021. We project vacancy to increase further to 15.6% by the end of 2021 from our previous year-end forecast of 12.5% due to the substantial completion of new office space and weak pre-leasing. Meanwhile, from a peak of 1.34 million square meters (14.4 million square feet) of office space occupied by POGOs (11% of Metro Manila’s office stock), POGOs now only occupy about 6% of the capital region’s office stock or 790,000 square meters (8.5 million square feet).

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SMHCC eyes Lanson Place opening in 2022
   

NEWS

SM Hotels and Conventions Corp. (SMHCC) announced that the country’s first Lanson Place has topped off. According to SMHCC, the Lanson Place and Serviced Suites Mall of Asia is projected to open in 2022. Lanson Place will consist of hotel rooms, serviced apartments, fitness center, all-day dining restaurant, rooftop swimming pool, and an al fresco facility on the hotel’s podium.

RESEARCH VIEW

In H1 2021, Colliers recorded the completion of 529 rooms, up from the 375 rooms in H1 2021. In 2021, we only see the delivery of about 1,027 rooms with the Bay Area accounting for 81% of the new supply. From 2021 to 2025, we project the annual completion of about 1,880 rooms, this is slightly lower than the annual delivery of about 2,197 rooms from 2018 to 2019. In our view, we see a slow recovery for the leisure sector, especially with the domestic and international travel restrictions still in place while the Delta Covid variant continues to constrict consumer confidence.

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‘On verge of collapse:’ Retailers plead for faster vaccine rollout

NEWS

The retail industry is pleading for a faster rollout of the COVID-19 vaccines as retailers run out of cash reserves after the implementation of strict community quarantines. According to Philippine Retailers Association (PRA) Vice Chairman Roberto Claudio, “the retail industry – stores, fastfood and restaurants are on the verge of collapse.” He added that the lockdowns and the low consumer traffic have depleted cash reserves, with online sales accounting for 8–15% of total store revenue. Meanwhile, PRA supported the imposition of localized lockdowns instead of wider quarantine restrictions to increase consumer mobility and keep retail establishments afloat.

RESEARCH VIEW

In Q1 2021, retail vacancy across the capital region reached 14% from 12.5% In Q3 2020 as several brick-and-mortar stores closed shop. In our view, the re-imposition of a stricter lockdown in Metro Manila as well as the subdued consumer confidence will likely push retail vacancy to about 16% by the end-2021. Colliers recommends that mall operators offer concessions to keep tenants. These include implementation of lower base rents and Common Service Usage Area (CUSA) fees.

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Related Experts

Joey Bondoc

Associate Director

Research

Manila

Prior to joining Colliers in March 2016, Joey worked as a Research Manager for a research and consutancy firm where he handled business, political, and macroeconomic analysis. He took part in a number of consultancy projects with multilateral agencies and provided research support and policy recommendations to key government officials and top executives of MNCs in the Philippines.

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Martin Aguila

Research Analyst

Research

Manila

Martin Aguila graduated in February 2019 from the De La Salle University with a degree in AB Economics. He joined Colliers Philippines in the same month and works as an analyst under the Research department. He has presented in several property market briefings with developers and investors and has assisted in the preparation of reports related to property such as Market Intelligence, GDP Flash, Quarterly Market Updates and Radar Reports. He also helps the team maintain and develop databases.

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