The POGO virus, corruption and crime
AS A MATTER OF FACT - Sara Soliven De Guzman (The Philippine Star) - February 24, 2020 - 12:00am

It seems our government officials are always the last to know what’s going on right under their noses. The officers of the Bureau of Immigration were “surprised” at the revelation by one of their own of the airport “Pastillas” bribery racket, where Chinese nationals are given unbridled entry into the country without the usual evaluation and questioning, for a fee of P10,000 per person.

China has already foreseen and warned the Philippine government of the potential crimes including money laundering as a result of the online games and has requested it to be banned, yet Duterte ignored the warning and denied China’s request.

Government’s response unsurprisingly, is again reactionary even after China has sounded the alarm and made the early warning signs. This should have prompted the government to conduct a thorough study and strategic planning even before the POGOS were allowed to operate. A comprehensive SWOT (strengths, weaknesses, opportunities and threats) exercise could have resulted to an early identification of potential problems and critical issues and the ways of dealing and combatting them.  The planning could have provided concerned government agencies to come up with a coordinated and systematic course of actions should these problems arise.

As indicated by Sec. Joel Villanueva, it appears that there are many loop holes in the implementation of the rules and regulations including issues related to coordination between concerned agencies.

With thousands of Chinese nationals coming in daily to work with Philippine Overseas Gaming Operators (POGOs), Senator Hontiveros estimated this VIP treatment scam to have netted about P10,000,000,000 since 2016. If this corrupt practice has been going on for years already, the Immigration bosses are either incompetent or they still have in their ranks more of the two Deputy Commissioners who were caught extorting 50 million pesos from 1,316 arrested Chinese nationals back in 2016.

The incarceration of these high-ranking officials did not serve as sufficient warning to their colleagues. It is alarming that they have even become bolder as the names of the Chinese nationals they are to “welcome” were allegedly sent through Viber, and at times, the number of their bribing “clients” would even fill an entire room. Has corruption been deeply embedded as an integral part of the system that they no longer fear its consequences? Or are they so daring because they have protection from above?

Unless the reward and gains of corrupt practices outweighs the dangers posed by POGOs particularly in the proliferation of sex workers, it is imperative that the government needs to implement drastic and urgent measures of curbing the problem.

 As hinted by Sen. Risa Honteviros, it’s not far-fetched that the proliferation of these problems (prostitution, sexual harassment, illegal detention, cyber fraud business), is under the wings of some authorities or government personalities.

Come to think of it, why would Chinese nationals, who are believed to be stingier than my Ilocano friends, shell out an additional P10,000 to gain entry to the Philippines? Obviously, they are not tourists for they come to work illegally with the POGOs.

 Corruption is one of the many social ills caused by the viral proliferation of POGOs in the country. A few days ago, the BIR raided and closed down a tax-evading POGO. How many more of these entities are not paying taxes or withholding and remitting employees’ income taxes? Are the Chinese workers even required to obtain working permits for proper monitoring? Are these POGOs remitting SSS, Philhealth or other mandatory contributions for their Filipino employees?

Then there is also the problem on criminality as a Makati investigator was quoted saying that Chinese abducting POGO workers is fairly common. There was also a report on a prostitution Sex Menu for POGO workers. Then a Taiwanese human-trafficking victim testified of having been abused and treated like a slave by her Chinese POGO employer, who even claimed having a protector high in government. We know that the POGOs have started coming over even before the present administration, but there may be some truth to the allegation of protection if we consider that stopping POGOs to curb the consequent social ills does not appear to be a priority concern for the present government? There is a Bill pending in Congress, but instead of regulation, the focus is on the additional government revenue from POGO taxes.

Yet, I have to admit that if we are doomed to host the POGOs until the gambling Chinese citizens run out of money, which will never happen, the proposed POGO Tax Law will resolve significant legal issues that could benefit the government in terms of revenue, if properly implemented. The BIR admitted that all the 50 online casino operators based abroad but licensed by PAGCOR to operate here failed to pay an estimated P50 Billion in withholding and franchise taxes in 2019. Apparently, PAGCOR has collected only a minimum regulatory fee equivalent to 2% of the operators’ gross revenue.

It is argued that since the bettor plays in a territory outside of the Philippines and the transaction is consummated in a foreign jurisdiction, there should be no basis for payment of Philippine taxes. But why obtain a PAGCOR license if they are not to do business here? Under the proposed law, it is clearly stipulated that an offshore gaming licensee subject to a 5% gross revenue tax would include a Philippine-based operator or an offshore entity engaging any PAGCOR licensed service provider. Thus, the latter, even though based abroad, would be considered as doing business in the Philippines making it liable to pay the tax. All being said, it is ironic that instead of regulating gambling, we end up promoting it.    

Don’t you think it is hypocrisy for China to ban gambling in its territory, yet allow its citizens to come to the Philippines and operate or work in POGOs so that Chinese citizens in China could gamble? The evil that they want to avoid is still happening in Chinese territory, although online. With the open pronouncement that the POGOs are catering to gamblers in China, the Chinese government should execute their citizens who hide their gambling operations in other countries, but are targeting as primary gambling clients their countrymen in China. I wonder if gamblers in China would also think of committing suicide if they lose big in online games. But since China is actually tolerating this to happen, they should just put up online gambling hubs in the islands they unlawfully occupy in the West Philippine Sea.  Anyway, our government seems helpless against Chinese intrusion that we could not even protest the installation of military infrastructure there.

It is truly pathetic that because of the revenues these POGOs are contributing to the government coffers, we must endure so many misbehaving Chinese workers in our country. Perhaps, if we could just be more vigilant in protecting our natural resources against foreign exploitation, we could do better than being easily swayed by the sparkle of money from the devil.

. JOEL VILLANUEVA POGO
Philstar
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