Philippine Offshore Gaming Operators vs. Other Offshoring Companies:

Will It Affect the Offshoring Industry? The Philippines has long been a hub for outsourcing and offshoring, providing many opportunities for companies looking to leverage cost-effective services. From call centers to IT services, the country has established itself as a premier destination for businesses seeking to optimize their operations. However, in recent years, the rise of Philippine Offshore Gaming Operators (POGOs) has added a new dimension to the offshoring landscape. This article explores the differences between POGOs and other offshoring companies and examines whether the growth of POGOs will affect the traditional offshoring industry.

The Rise of POGOs

POGOs are online gambling companies that operate in the Philippines but cater primarily to customers outside the country, especially in China. The Philippine government has embraced POGOs as a significant revenue source through licensing fees and taxes. The sector has increased, attracting foreign investment and creating thousands of jobs.

Traditional Offshoring Companies in the Philippines Traditional offshoring companies in the Philippines span various sectors, including
business process outsourcing (BPO), knowledge process outsourcing (KPO), information technology outsourcing (ITO), and shared services. These companies have driven the country’s economic growth, provided employment to millions of Filipinos, and generated substantial export revenue. Learn more about The different types of outsourcing .

Comparing POGOs and Traditional Offshoring Companies

Nature of Business :

• POGOs : Primarily focused on online gambling services, catering to international clients, mainly from China. Their operations include customer support, IT services, and gaming operations.
• Traditional Offshoring Companies : Offer a wide range of services, including customer service, technical support, software development, finance and accounting, and more, catering to various global industries.

Regulatory Environment :

• POGOs : Operate under strict regulatory scrutiny due to the nature of their business. They face challenges related to legal compliance, taxation, and international relations, particularly with China, where gambling is heavily restricted.
• Traditional Offshoring Companies : Operate within a more stable regulatory framework, with established guidelines for labor practices, data security, and business operations.

Economic Contribution :

• POGOs : Contribute significantly to government revenue through taxes and licensing fees. However, their economic impact is often debated due to concerns about legality, social issues, and the industry’s sustainability.
• Traditional Offshoring Companies : Provide a steady and sustainable contribution to the economy, creating long-term employment opportunities and contributing to the country’s GDP through consistent export services.

Impact of POGOs on the Offshoring Industry

The rapid growth of POGOs has sparked discussions about their potential impact on the traditional offshoring industry. Several key areas are worth considering:

1. Competition for Talent : POGOs offer competitive salaries and benefits, attracting talent that might otherwise join traditional offshoring companies. This could lead to a talent drain in the IT and customer service sectors.
2. Reputation and Regulatory Risks : The association of POGOs with legal and regulatory challenges might cast a shadow on the broader offshoring industry. Ensuring that the reputation of traditional offshoring remains untarnished is crucial for sustained growth.
3. Economic Diversification : While POGOs add to the country’s economic portfolio, reliance on an industry with inherent risks might not be sustainable. Diversifying the offshoring landscape by strengthening traditional sectors can mitigate potential risks.
4. Infrastructure and Real Estate : The influx of POGOs has increased demand for office space and housing, increasing real estate prices. This can affect the cost structures of traditional offshoring companies.

Conclusion While POGOs and traditional offshoring companies operate within the same geographic space, their economic and societal impacts differ significantly. The growth of POGOs presents opportunities and challenges for the offshoring industry in the Philippines. Balancing the benefits of POGOs with the sustainable development of traditional offshoring sectors is crucial for the country’s long-term economic stability.
Ultimately, the Philippines’ ability to navigate these dynamics will determine whether the rise of POGOs will complement or challenge the well-established offshoring industry. As the landscape evolves, stakeholders must ensure that both sectors can coexist and contribute positively to the nation’s economic future.

Originally published at https://biznewsonline.weebly.com.