Filipinos put in harm’s way
THE CORNER ORACLE - Andrew J. Masigan (The Philippine Star) - March 11, 2020 - 12:00am

I am a father, an employer, an uncle and a friend. I will never put the people in whom I have responsibility for in harm’s way. To do so would be irresponsible and reckless.

This is why I cannot comprehend the President’s decision to allow the Philippine Offshore Gaming Operators (POGO) industry to continue operating despite its social costs. Criminality, violence and money laundering are not to be taken lightly.

As the nation’s leader, the President’s first priority should be to ensure the safety and security of the Filipino people. By allowing the continued operations of POGO, he puts every Filipino at risk.

According to Teresita Ang-See, the chair of the anti-crime watchdog, Movement for the Restoration of Peace and Order, “the Philippines has become a haven for Chinese criminals and criminal syndicates.”  In fact, records show that 634 Chinese fugitives are confirmed operating in the Philippines through POGO firms. POGOs exposes us all to such crimes as investment scams, prostitution, assault, illegal immigration, bribery, human trafficking, torture, kidnapping and murder. In my book, no amount of financial gain is worth the life, liberty and safety of our countrymen.

Presidential Spokesman Salvador Panelo asserted that the President has not received a formal report that confirms that these crimes are indeed happening. Why, then, should he be rushed into declaring POGOs illegal?

A formal report is not necessary when a spike in criminal activities in the cities where POGOs operate are already of public record. It is not needed when evidence of money laundering has already been presented, the purpose of which could be attached to terrorism. It is irrelevant when cases of bribery among immigration and customs officials have already been exposed In fact, even just a whiff of these activities happening should be a cause for alarm and reason enough to outlaw POGOs.

All this has led me to ask – was the President’s decision borne out of protecting the Filipino’s best interest? Are there other factors and/or interests at play?

The Palace argues that we cannot afford to lose jobs now that we are grappling with the economic impact of COVID-19. Neither can we forgo with the revenues derived from POGOs which the Palace claims is about P17 billion per month.

I question the sincerity of Malacañang’s argument on employment considering that just two months ago, it was ready to terminate 11,000 jobs just to even the score with ABS-CBN .

As for the P17 billion revenues, yes, I agree that it is a substantial loss. But again, is it worth the lives and safety of our countrymen? Is it worth the risk of being red flagged by the International Financial Action Task Force for money laundering? Is it worth escalating the already bad state of corruption in government? Absolutely not.

For the sake of argument, let us assume that Malacañang is sincere when it says that P17 billion will hurt the economy. Who stands to lose the most?

The biggest loser will be the real estate industry. As much as 1.14 million square meters of office space will be vacated in Metro Manila alone, representing 10 percent of total leasable space. In the residential market, more than 30,000 units will be vacated if POGO is outlawed. Those who stand to lose the most are the landlords.

But government loss will not be substantial. Records show that the Bureau of Internal Revenue (BIR) collected only P6.42 billion last year, the bulk of which are attributed to withholding taxes. POGOs are notorious for tax evasion and the Department of Finance estimates that the state lost some P27.35 billion on unpaid corporate income taxes last year. Worse, the majority of Chinese POGO workers evade paying personal income taxes despite working in our shores. Losses here is between P27 to P50 billion depending on who you believe has the correct information on the number of POGO workers.

The BIR pegged the number of POGO workers at 44,798, the Department of Labor and Employment at 71,532 and PAGCOR’s figure was 93,697. Leechiu Property Consultants, a private firm, puts the number at 400,000 to 500,000. 

Government cannot even collect the right taxes from the POGO industry. Why is it insisting on allowing POGOs to operate when it is incapable of regulating it?

Losses of P17 billion a month represents a tenth of one percent of the economy. It is that small. If indeed this matters to government, it just goes to show that it is desperate to keep the economy from decelerating further.

Despite its bravado, the economy has actually been losing pace since the start of the Duterte administration. From a GDP growth rate of 6.9 percent in 2016, it has gradually slid down to just 5.6 percent in 2019. The prospects for 2020 is not promising either.

This is because this administration has relied on consumer demand and government spending as the main drivers of the economy. The former is fueled by OFW remittances while the latter is financed by debt. Everything seems fine today with 10 million Filipinos deployed abroad and banks eager to lend money to the country. But what happens when countries close their doors to Filipino workers (as we have recently seen in Kuwait) or worse, when we reach our debt ceiling and can no longer borrow? This house of cards will come tumbling down.

This administration has been lulled into complacency with OFW remittances and debt. Apart from TRAIN, CITIRA and Build Build Build, it has not addressed what is fundamentally wrong with the economy to enable us to attract more foreign investments and become a production-led economy.

Perhaps this P17 billion argument is an act of desperation to save an economy losing momentum.

Regardless of what President’s motivations are for allowing POGO to operate, I am bothered that we are all being put in harms way for a mere P17 billion a month. It is just not right.

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