Regulate

The simplest – and worst – way to approach the POGO issue is to reduce things to a binary choice: tolerate them or ban them. Love them or leave them.

A simplistic binary view of the matter will dissolve all nuances. It will gloss over the poor quality of regulation so far exercised – at the risk of allowing such weakness to persist in other future cases.

Politicians, grandstanding on any issue, have a propensity for reducing things to binary choices. Good or bad. Black or white. It is easier to wow constituents that way.

The POGOs (Philippine overseas gaming operations) are not creations of policy. On the contrary, they proliferated because no policy was in place. They are creatures of what technological possibilities emerged, given the variance in gambling policy across jurisdictions.

The growth of a particular economic sector through the gaps in the policy architecture is not unique to the POGOs. Our export of migrant labor happened this way. The growth of our business process outsourcing (BPOs) happened this way, too.

It was only after our bureaucrats discovered we had millions of workers abroad or that hundreds of thousands were employed in “call centers” did they play policy catch-up. Only after the fact did we vigorously work for protecting our migrant workers abroad and providing adequate reentry possibilities for the returning ones. It was only a few months ago that we legislated a Department of Migrant Workers into place.

The POGOs took root here because gambling is banned in China even as digital technologies now allowed the Chinese the opportunity to play out their gambling propensities by way of online casinos. It is not a happy solution, we know. Beijing frowns on our hosting of online gambling enterprises. Some of our people are unhappy about the “social costs” of hosting what are obviously unwholesome businesses.

The POGOs, badly regulated as they are, did produce some economic benefits for us. The Department of Finance admitted that the country could lose P65 billion in taxes, rentals and license fees if government abruptly shuts down this sector. Income from housing space rentals amount to P25.17 billion. Government makes P3.43 billion from VAT imposed on housing space rentals alone. Another P5.56 billion is made from personal consumption of POGO employees. PAGCOR makes P3.5 billions in regulatory fees. And so on and so forth.

In a word, our economy will take a large hit if the POGOs are abruptly shut down. We are only now trying to emerge from the ruins wrought by the pandemic.

The POGOs likewise generate tens of thousands of jobs. From these jobs, families are fed and small retailers draw their businesses. The social dislocation of abrupt closure will probably be larger than the “social costs” abolishing the POGOs are supposed to avoid.

Perhaps we should think in terms of better regulating this business sector rather than dangling the prospect of outright abolition. We are a country deep in debt and every possibility to raise revenues is welcome.

Learn from how we eventually dealt with the migrant worker phenomenon or the growth of BPOs. Had we banned both outright, our economy would have been dead in the water today.

Defective

The Parañaque city council released a 14-page report summarizing its findings on the abrupt termination of the old garbage contractor and its replacement with a new outfit that is obviously not up to the task.

The report found that the contract entered into by Mayor Eric Olivarez is “defective.” Without authority from the city council, the contract is “unenforceable.”

Even after the city council commenced an inquiry into the “defective” contract, the city administrator who heads the Bids and Awards Committee still fails to provide it a copy of the terms of reference for the contract. This violates every rule on transparency. Reluctance to produce that document merely adds to the suspiciousness of this deal – or the haphazardness by which it was struck.

Through the inquiry, the council discovered that the new garbage contractor did not have a business permit in the city prior to the award of the contract. The new contractor, Metrowaste, was issued a business permit only on Dec. 29, 2022 – two days after the contract was awarded. We have heard nothing from the company that fails, with each passing day, to properly collect the trash it was contracted to do.

It has also been established that no ordinance exists that grants the mayor blanket authority to sign contracts on behalf of the city. Without such an ordinance, the contract entered into cannot possibly be valid. Mayors cannot so cavalierly overstep the bounds of their authority.

These are not minor technicalities. The citizens of Parañaque are currently enduring a garbage crisis, with trash piling higher up each day. This is because the new garbage contractor does not have the equipment necessary to fulfill its obligations despite being awarded a much larger contract amount than the previous year.

Every public official who enters into a service contract has the obligation to ensure that contract is met. There are penalties for contractors who fail to fulfill their end of the bargain. The council must now decide if the invalid contract still persists. If not, someone must be designated to collect the trash.

Having found the garbage contract entered into by Mayor Olivarez defective, the city council must now exact accountability. The great inconvenience now borne by the people of this unfortunate city cannot just pass without penalty.