When President Ferdinand Marcos Jr. signed Executive Order 74 in July 2024, mandating a total shutdown of Philippine Offshore Gaming Operators (POGOs) by the end of 2025, the Manila office market braced for a shift. By late 2024, POGOs accounted for about 33 percent of vacated office space, roughly 260,000 square meters, according to a report from the Tribune.
This sudden wave of supply reshaped the balance of power in Metro Manila’s office leasing market. With high availability, tenants now hold more negotiating power and can request rent reductions, flexible leases, or incentives like rent-free periods or fit-out support. For those evaluating property transactions, understanding the nuances of reviewing property sales contracts remains essential, even in a commercial context.
Breaking Down the POGO Ban’s Effect on Office Space
These three forces define the post‑POGO office market. The vacancy surge is concentrated in specific districts, while the negotiating pendulum has swung toward tenants. Landlords, in turn, face a choice between costly renovations and offering blank‑canvas spaces.
Context: What the Ban Means for Tenants and Landlords
Transaction volume dropped by 57 percentage points, creating a negative net take‑up of -45,000 sqm for the year. That statistic alone doesn’t capture the full picture: a company looking to expand now finds itself in a buyer’s market, while a landlord with a former POGO floor faces a tough leasing environment.
On the other hand, secondary hubs like Ortigas offer a promising alternative. Rents there are lower, and infrastructure improvements make them more attractive for companies seeking cost savings. Tenants who can wait or relocate may find better deals outside the primary POGO‑affected areas. For investors, condo living and community building in these developing hubs could also see spillover demand.
Complications: The Fine Print of Vacant POGO Spaces
Layouts That Don’t Fit
Former POGO offices were built for rows of gaming stations, not standard office cubicles. The dense floor plans, reinforced cabling, and limited natural light make them unattractive to most corporate tenants. Landlords are advised to either refurbish these spaces or strip them down to bare shell.
Bare Shell Demand
Multinationals and startups increasingly prefer blank slates they can customize from scratch. The trend has pushed bare shell spaces to the forefront, with a substantial inventory available across Metro Manila. Landlords who can deliver a clean, open floor stand a better chance of attracting high‑quality tenants.
Negotiating Leverage
Tenants hold the upper hand. They can request not only rent reductions but also flexible lease durations, rent‑free periods, and fit‑out allowances. This leverage extends to lease renewal discussions, where existing tenants can renegotiate terms that were previously non‑negotiable.
For those navigating lease agreements, understanding apartment lease insurance requirements offers a useful parallel for evaluating risk in commercial property.
What To Do With This Market Shift
For Landlords: Refurbish or Revert to Bare Shell
Assess your property’s current condition. If the former POGO layout is too restrictive, consider a full renovation. Alternatively, stripping the space to bare shell can attract cost‑sensitive outsourcing firms and startups. The investment may be worth it to avoid prolonged vacancy.
For Tenants: Leverage Negotiating Power and Consider Secondary Hubs
Use the current market to your advantage. Request rent reductions, flexible leases, and fit‑out incentives. Also explore secondary hubs like Ortigas, where rents are lower and infrastructure has improved. Companies that act now can lock in favorable terms before the market tightens.
If you are exploring long‑term property investments, buying your dream home involves similar considerations of market timing and financial readiness.
Frequently Asked Questions
How does the US tariff pause affect the Philippine office market? ▾
What percentage of office leasing activity is expansion‑related? ▾
When is the office market expected to recover? ▾
What is the total bare shell space available in Metro Manila? ▾
What is the best strategy for landlords with POGO spaces? ▾
Closing Thoughts
The POGO ban has reshaped Metro Manila’s office landscape, creating both challenges and opportunities. Tenants should act now to lock in favorable terms, while landlords must adapt their properties to meet evolving demand. Keep an eye on secondary hubs and the recovery timeline as the market recalibrates. If this was useful, you might also want to read future‑proof your investment with strategic considerations for buying a house and lot in the Philippines.
Sources
Creating emergency supply kits for Philippine earthquakes — A practical guide for disaster preparedness, relevant for property owners assessing risk.
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Airbnb horror stories in the Philippines: how to avoid common host mistakes — Real‑world lessons for short‑term rental investors.
POGO ban spurs office market reset in Metro Manila. Tribune, 2025.
