EDITORIAL - Banning POGOs

The more lawmakers scrutinize Philippine Offshore Gaming Operator firms, the more you wonder why the government continues to hold on to them. Do POGOs hold sentimental value?

If the government is worried about losing revenue, Sen. Sherwin Gatchalian says that based on projections of the Department of Finance, POGOs should be paying at least P35 billion in taxes annually. As of the third quarter of 2022, however, Gatchalian said POGOs had contributed only P7.2 billion to national coffers, with the total expected to reach only P8.5 billion for the entire year.

If the concern is job generation, Gatchalian pointed out that at the height of POGO operations in 2019, the gaming firms and their service providers employed 120,000 people. Fewer than 20,000, however, were Filipinos; the rest were foreigners, mostly Chinese who speak Mandarin and other dialects of that country. The language requirement is not surprising, since POGO clients are mainly mainland Chinese, who are prohibited by their government from engaging in offshore gaming. Senators have said alternative employment can be found for the Filipinos who will be displaced in case POGOs are banned.

Beijing has been urging the Philippine government to ban POGOs, not only because offshore gaming is illegal under Chinese laws, but also because criminal gangs have been linked to the operations, engaging in kidnapping for ransom, extortion, torture and even murder of Chinese nationals in the Philippines. But banning POGOs is one Chinese request that even Beijing-friendly Rodrigo Duterte rejected during his presidency.

Senators have pointed out the adverse impact on the country of an activity that is illegal in China. Reports of Chinese nationals being kidnapped in the Philippines by criminals linked to POGOs can affect visitor arrivals from China, traditionally one of the biggest sources of tourists before Beijing pursued a zero-COVID policy and locked down the entire country.

Beijing has lifted the zero-COVID policy and Chinese have resumed traveling. Senators warn that the risks posed by POGO-linked criminals will make the Philippines an unattractive destination for Chinese tourists. The loss in tourism revenues can be higher than whatever the government hopes to earn from POGOs.

In the latest issue raised against POGOs, the Senate ways and means committee chaired by Gatchalian learned that the private consortium contracted to audit the gaming firms were found to be operating without permit or even a permanent address, and was not paying proper taxes. This prompted the Philippine Amusement and Gaming Corp. to consider rescinding its P6-billion, 10-year contract signed in 2017 with Global COMRCI Consortium. PAGCOR is also seeking a refund of $7.9 million from Global COMRCI.

President Marcos has said he wants to be presented with convincing reason to completely ban POGOs. Senators have unearthed more than enough reasons to drop POGOs for good.