Economy will survive without POGOs – senator

MANILA, Philippines — A pullout of Philippine offshore gaming operators (POGOs) in the country would not make much of a dent on the economy, which remains resilient and on an upward growth path, Sen. Sherwin Gatchalian said yesterday.

Gatchalian chairs the Senate ways and means committee that held an inquiry on the social and economic costs of POGOs. The committee is expected to come out with its report that is likely to recommend to the Marcos administration to outlaw such gaming firms that largely employ Chinese nationals.

He said projections from the Department of Finance (DOF) show the government should be collecting at least P35

billion from POGOs annually in income taxes but in the third quarter of 2022, the collection was only P7.2 billion, projected to reach about P8.5 billion in December.

He said there may be some job displacements and effect on the real estate industry but they can be addressed in a few years, especially with the expected bounce back of the business process outsourcing industry.

He said in 2019, the peak of POGO operations, the sector employed some 120,000 individuals, of whom only 20,000 or less were Filipinos.

“My point there is even during the height of POGOs, job generation is not to its maximum. The only job generation that we are creating is foreigners, not for our own people,” Gatchalian said.

He said the real estate sector would also stabilize with the exit of POGOs, which created a bubble in the industry with the artificial jump in commercial and residential space and prices.

During the committee hearing on Monday, Gatchalian hit the Philippine Amusement and Gaming Corporation (Pagcor) for its failure to comply with its own terms of reference (TOR) when it entered into a P6-billion contract with Global ComRCI consortium to be the third-party auditor of POGOs.

It was revealed during the hearing that Pagcor did not follow its own TOR, which provided the requirements necessary for an entity to qualify as a third-party auditor of gaming revenues declared by POGO operators.

The 10-year contract between PAGCOR and Global ComRCI started in 2017.

“How come nobody saw this? How did this slip through you? How did this get through? It’s either you were duped or you allowed yourselves to be duped,” Gatchalian told Pagcor officials at the hearing.

For his part, Sen. Alan Peter Cayetano urged the government to stop all POGOs, adding the negative impact of these businesses on society far outweighs their supposed economic benefits.

“We must put a stop to POGOs because that industry has become a breeding ground for illegal activities such as money laundering, and there have been multiple reports of kidnapping and even murder of those working in the industry,” Cayetano said.

“In fact, rather than benefiting the economy, the presence of POGOs has harmed the reputation of our country in the international community,” he said, adding that no amount of tax revenue can justify the social costs of gambling.

“No matter how much money you show me, my personal position will not change that gambling should not be allowed because it is bad for society,” he said.

In Congress, ACT Teachers party-list Rep. France Castro yesterday asked President Marcos to ban POGOs now since he himself thinks that the cost of allowing them might not worth the taxes that they pay.

According to Castro, there are already “many reasons” to ban POGOs so it is now time to close the country’s doors to them.

“These POGOs should be closed,” said Castro as she echoed the position of other members of the Makabayan bloc, namely Kabataan party-list Rep. Raoul Manuel and Gabriela Women’s party-list Rep. Arlene Brosas.

Castro noted the security concerns raised against POGOs are still “very much valid because these hubs can be used for the expansionist military and political purposes of a foreign country, like China.”

“Remember that in 2020 police were able to seize three .45-caliber and two 9-mm pistols and around 65 rounds of ammunition from the Chinese in a raid of an illegal POGO, plus 400 cell phones, 17 desktop computers, 36 laptop modems and around P1.3 million in cash,” she added.

At least 73 Chinese passports were also confiscated, although “authorities were not immediately certain whether some were duplicates or they belonged to those who were not in the house during the raid.”

Meanwhile, Pagcor assured the public of a speedy review of the offshore licensees’ third-party auditor.

“With the assumption of the new leadership of Pagcor, the contract of Global ComRCI was put under review last September 2022. We assure the senators that the review will soon be finished and released at the proper time,” read the statement of the government-owned and controlled corporation.

“We have been in contact with Global ComRCI and are currently assessing the contract’s terms and conditions and the company’s performance,” it added.

Pagcor leadership thanked the Senate for the opportunity to clarify matters related to the country’s offshore gaming license operations.

Pagcor, however, clarified there have been no reported criminal activities or kidnapping-related incidents of workers in the offshore licensing industry for over three months.

This came as a result of the inter-agency cooperation meeting held last September involving Pagcor, the Philippine National Police, the National Bureau of Investigation, the Department of Justice and the Department of Interior and Local Government to combat illegal gaming operations, including offshore gaming. – Sheila Crisostomo, Cecille Suerte Felipe