NEDA Regional Director says the POGO ban serves as an opportunity to shift investments toward more productive sectors that create jobs and boost income.
Central Luzon’s economy registered 6.1 percent growth in its Gross Regional Domestic Product (GRDP) in 2023, equating to approximately P2.3 trillion, according to the National Economic and Development Authority (NEDA). This growth is seen as a positive sign of recovery after the severe disruptions caused by the COVID-19 pandemic. However, it marks a slight decline from the 8.1 percent growth the region experienced in 2022, which had been an extraordinary rebound from pandemic-induced economic slowdowns.
While all provinces and highly urbanized cities in the region reported positive growth rates, with figures ranging from 4.6 to 7.5 percent, the most notable development came from the services and industry sectors. Particularly noteworthy is the shifting economic landscape following the recent ban on Philippine Offshore Gaming Operators (POGOs), which has affected several parts of the region, especially those reliant on this industry.
The POGO Effect and Redirecting Investments
The Philippines has long been a hub for POGOs, with Central Luzon seeing a significant rise in POGO-related businesses, especially in the cities of Angeles and Olongapo. These establishments, largely catering to online gaming operations, had been controversial due to their social and regulatory implications, but they also contributed to the local economy through jobs, real estate leasing, and services.
However, with the government's recent crackdown and ban on POGOs, Central Luzon is now faced with the challenge of redirecting investments to more sustainable, job-creating sectors.
According to NEDA Regional Director Nerrisa Esguerra, this shift presents an opportunity for the region to focus on growth sectors that can deliver long-term benefits, such as agriculture, manufacturing, and digital services.
Esguerra emphasized that while the exit of POGOs may be a setback, it also opens the door for better opportunities in industries that can foster more substantial, income-generating jobs. These include high-value sectors like information technology, business process outsourcing, and manufacturing, which are all well-positioned to absorb displaced workers from the gaming industry.
Services and Industry Lead the Charge
Despite the turbulence caused by the POGO ban, the services sector remains the region's top economic driver. Contributing nearly half of the region's total GRDP, services posted impressive growth, surpassing pre-pandemic levels since 2022. Esguerra noted that the services sector’s growth is not just vital for the region’s economy but also for ensuring the sustainability of other industries such as agriculture and manufacturing.
"The services sector continues to demonstrate a robust performance. Therefore, it will be crucial to sustain its growth and ensure that services are linked and add value to the outputs of the industry and agriculture sectors," Esguerra was quoted as saying in an article published by the Manila Times.
A key initiative to maintain momentum in the services sector has been the push to integrate micro, small, and medium enterprises (MSMEs) into the digital economy. Through increased access to e-commerce platforms and digital tools, businesses in the region are being empowered to streamline operations, improve efficiency, and reach a broader market. This initiative aligns with the government’s broader agenda to digitize the economy and support MSMEs, a sector crucial for job creation in the Philippines.
In addition to services, the industry sector has also been a major contributor to growth, accounting for 42.3 percent of the region’s GRDP. Central Luzon’s strategic location, particularly its proximity to Metro Manila, continues to make it an attractive destination for investments, especially in manufacturing and logistics. NEDA plans to leverage this geographic advantage to sustain industrial growth and further boost the region’s appeal to both local and foreign investors.
Agriculture Shows Promise Amid Challenges
While agriculture continues to be an important sector in Central Luzon, contributing 10.8 percent to the region's GRDP, its growth remains constrained. The sector grew by just 2.6 percent in 2023, up slightly from 2.1 percent in 2022. The increase is encouraging but still not enough to bring agriculture back to pre-pandemic levels, which had seen more robust growth.
Frequent weather-related disasters and climate change continue to pose challenges to agricultural productivity in the region. Despite these hurdles, Esguerra believes the sector holds untapped potential that could be unlocked with better infrastructure, more resilient agricultural practices, and increased investment in modern farming technologies. She stressed that agricultural development remains a priority for the region, as it supports rural communities and ensures food security across Central Luzon.
Central Luzon’s economy has demonstrated resilience and adaptability in the face of challenges, from the COVID-19 pandemic to the evolving regulatory landscape surrounding POGOs. The region’s diversified economy, which balances services, industry, and agriculture, provides a solid foundation for future growth.
Read related article: Inspections Urged Amid POGOs “Fronting as Resorts, Hotels”
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