Philippine property stocks slumped on Tuesday after President Ferdinand Marcos Jr. ordered the shutdown of online casinos targeting Chinese bettors, a move expected to leave many office spaces vacant.
The Southeast Asian nation’s property index dropped as much as 2.6%, marking its biggest decline in a month. Leading the downturn were developer DoubleDragon Corp. and its real estate investment trust, which fell as much as 11% and 10% respectively.
Other major developers, including SM Prime Holdings Inc., Filinvest Land Inc., Ayala Land Inc., Megaworld Corp., and Robinsons Land Corp., all experienced declines of over 2%. The benchmark stock index also saw a slight decrease.
In his Congress speech on Monday, Marcos ordered authorities to shut down Philippine offshore gambling operators (POGOs) by the end of the year. This decision follows a Senate probe and public scrutiny over the facilities, which flourished during the administration of former President Rodrigo Duterte. The president cited concerns over crimes associated with POGOs, including money laundering and human trafficking.
The ban could have significant repercussions for the real estate industry, as POGOs account for 11% of the total gross demand for commercial office space in the country, according to Wendy Estacio-Cruz, an analyst at Unicapital Securities. “However, this is down from last year and from the 2019 peak of 25% of total demand. We believe this should affect general sentiment on property stocks,” she said, as reported by Bloomberg.
SM Prime Holdings’ chief finance officer, John Ong, told Bloomberg that the company does not anticipate significant effects from the ban.He noted that POGO service providers currently occupy only 1% to 2% of the company’s leasable office space, down from 8% before the pandemic. Ong expressed confidence in leasing out the vacated space to other businesses.
Original article: https://www.yogonet.com/international/noticias/2024/07/23/73255-philippine-property-stocks-plunge-after-president-marcos-orders-shutdown-of-online-casinos
