POGO comeback

If it’s a business process outsourcing or BPO operation, what activity is being outsourced, and who’s doing the outsourcing in the POGO?

You have to be high on fentanyl to believe that Philippine offshore gaming operators can be lumped alongside BPOs. POGOs are gambling operations, plain and simple, done offshore because they are illegal in China.

The Information Technology-Business Process Association of the Philippines issued a statement last Saturday, saying POGOs could not be considered as BPOs. The registration alone, the IBPAP pointed out, is a giveaway: POGOs are registered with the Philippine Amusement and Gaming Corp., while BPOs are registered with the Board of Investments and the Philippine Economic Zone Authority. PEZA issued a statement yesterday, agreeing with the position of the IBPAP.

Beijing, citing the corrupting influence of gambling on society, has been asking the Philippine government to shut down POGOs, because these cater mainly to the Chinese, who are prohibited from engaging in all forms of gambling, including online and offshore. But it’s one of the rare requests from Beijing that the Duterte administration has rebuffed.

And now, the administration is bent on restarting the POGOs ASAP.

Why? The government should just level with everyone: it’s in dire need of funds, as businesses collapse and revenue sources shrink. Gambling is the answer: the money is huge and earned quickly. But the new normal with physical distancing can be tough to enforce in casinos, bingo stations and gaming arcades, so gambling remains banned even under general community quarantine.

Online gaming, on the other hand, can be conducted from a desk in a cubicle. The majority of employees are Mandarin-fluent Chinese. So why not let them reopen, but this time making sure they pay the right taxes and fees?

If our government couldn’t collect the right taxes in the past from POGOs and their service providers, I don’t see how this can be done now. The technology hasn’t changed, and it’s tough to track online transactions – especially when the players and operators are evading detection by their own government, which has a highly sophisticated surveillance system.

Speaking of surveillance, offshore gaming proponents have not yet allayed fears of the Philippine defense/military establishment about the spying potential of POGOs.

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Shortly before the Luzon-wide ECQ was imposed, China ordered its citizens employed in POGOs to return home. Buildings housing POGOs as well as most of the restaurants and grocery stores that catered almost exclusively to the Chinese have since been vacated. The signage on most of them does not say “temporarily closed” but “for lease.” That doesn’t sound like anyone is coming back, although we know that several Chinese operators have remained, and were recently arrested for running offshore gaming illegally.

If our government would level with the people and admit that the social amelioration program alone requires many billions more to help those suffering from the COVID-19 pandemic – which is pretty much everyone – people might understand that desperate times call for desperate measures.

On the other hand, as we are seeing from the reactions of certain public officials and personalities on social media, there are Filipinos who are offended that the government is giving priority to restoring the livelihood of foreigners (accounting for 75 percent of the POGO workforce) ahead of the livelihoods of Filipinos.

There are also concerns about health protocols in the POGOs. Their Chinese employees don’t live in cocoons; they shop in the major local supermarket chains and even public markets, eat (or buy take-out during the ECQ) from local fast-food outlets, buy medicine from local drug stores. In short, they mingle with the rest of us.

While POGOs and their service providers pay premium rates for rent, driving up real estate prices in Metro Manila, there are many stories of landlords eventually canceling the leases because the Chinese employees were being crammed into the dwellings to save on costs – with the congestion reminiscent of images from overcrowded Philippine jails. Those cramped POGO dormitories are virus incubators.

If allowed to reopen, the POGOs will need Chinese employees back. After recent scandals at Immigration and the casinos, are we accepting workers from China at this point? I doubt if Filipinos can learn to speak Mandarin overnight – a key skills requirement in POGOs. My Hokkien from Fujian is limited to the most basic conversational words, numbers, cuss words and a kindergarten song. And even Hokkien-fluent Tsinoys stumble on their Mandarin.

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What might be alternatives to POGOs for our harried revenue collectors? Nearly all sectors are seeking tax breaks to restart the economy, and the pandemic has added millions to the ranks of the impoverished.

In previous economic slowdowns, we could depend on remittances from overseas Filipino workers to keep us afloat. But now the collapse of the crude oil industry is forcing hundreds of thousands of OFWs in the Middle East and North Africa to come home. Italy and the UK, two of the countries with the largest OFW populations, have been among the most battered by the pandemic.

If the government is bent on quick, big bucks from gaming, it can revive the lottery, with physical distancing strictly enforced at lotto outlets.

Horse races could be resumed for the sweepstakes, but with no live audience, and redesigned as well for distancing – if that’s possible; I’m no gaming aficionado so I don’t know.

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Economic recovery can start in earnest only when we have sufficiently ramped up our capabilities for COVID testing, contact tracing, isolation and quarantine.

In Taiwan, which did all that in January and never had to resort to lockdowns, a resident I know told me over the weekend that life was almost completely back to pre-COVID normal – they’re used to all the public health protocols that we are just starting to institutionalize. Even flea markets have resumed operations, the resident told me.

In Metro Manila and certain provinces still under ECQ, several local executives have indicated that they might ask for an extension of the ECQ after May 15, since their COVID testing and contact tracing capabilities still need enhancement.

Many people are amazed at Americans staging protests against stay-at-home orders, despite the US recording over 1.16 million cases and 67,000 deaths as of yesterday. One possible upside is that they could be the first to develop COVID herd immunity.

We look with envy at other places around the world that are reopening – although we also wonder which ones would report a resurgence of the coronavirus disease 2019. After all, there is still no cure and no vaccine for COVID-19.

Interestingly, among the first businesses to be allowed to reopen in those places are salons and barber shops.

In our country, a priority for reopening is offshore gambling.