The Philippines may have banned offshore gaming, but it doesn’t mean that the people behind it, especially the Chinese, are no longer around.
Perhaps this is one negative result of the ban – an iteration, or rebirth, that was a lot worse.
No less than Chinese Ambassador Jing Quan confirmed this during a recent meeting with executives and editors of The STAR, led by our president and CEO Miguel Belmonte.
The meeting was not about POGOs, but I took the chance to ask Ambassador Jing if there were any developments related to the ban on POGOs, which took effect in late 2024.
He said that some POGO operations still exist, but these have morphed into scam hubs. The Chinese embassy, he said, continuously works with local authorities to crack down on perpetrators of these scams and make sure they are brought to justice.
It’s not just Chinese nationals who are involved. There are other nationalities from Asia.
Just recently, the National Bureau of Investigation (NBI) dismantled an alleged online scam hub in Olongapo City, securing around 200 Vietnamese nationals.
Authorities seized computers, mobile phones and documents used in the operation.
NBI Director Melvin Matibag said the raid was just one step.
Investigators would also trace the money moving through the operation and pursue those who provided bank accounts and e-wallets for the transactions.
The NBI, according to The STAR’s report, is working with the Anti-Money Laundering Council and concerned financial institutions to identify and freeze accounts allegedly used by the hub. The investigation into its operators and foreign links is ongoing.
Visa-free entry privileges
Unfortunately, the scams persist partly because some of these foreign nationals are able to enter the Philippines visa-free.
Justice Undersecretary Nicholas Felix Ty, for instance, said that some of the foreigners, mostly Chinese nationals apprehended in the Zamboanga Sibugay raid earlier this month, entered the Philippines under a visa-free arrangement.
“We cannot deny that this is a privilege we granted to Chinese tourists and that, to some extent, it has been exploited, contributing to this problem,” Ty said during a recent media briefing.
Revoke the privilege
The Department of Foreign Affairs restored visa-free access for Chinese visitors on Jan. 16, allowing visits of up to 14 days strictly for tourism or business purposes.
Perhaps it’s time to revoke this privilege because it is being abused by unscrupulous Chinese nationals.
The arrangement is subject to review before it expires a year after its implementation, according to news reports.
These Chinese nationals recruited to work in scam hubs target fellow Chinese citizens because it is easier for them, given that there is no language barrier, Ambassador Jing said.
He noted that, indeed, the visa-free privilege is being used by the scam perpetrators.
Some countries in Southeast Asia have been cracking down on scammers, which is why some of them are moving to the Philippines, taking advantage of the visa-free option, he said.
Some scams are small-time operations, while others are sophisticated, but big or small, they usually operate in connivance with local partners.
The scams are varied – from credit card fraud and SMS scams to romance scams – targeting not just Filipinos but other nationalities.
This is the reason, Ambassador Jing said, why the embassy is closely working with local authorities – to really put an end to such scam operations.
Digital fraud, money mules
A few days ago, I was among the panelists in a fireside chat about scams organized by tech company IDfy Philippines as it launched “Chaos in Cavite,” a graphic novel aimed to educate the public and the financial industry on the mechanics of money mule networks and digital fraud.
The chat discussed how these scams succeed with the help of money mules, or those who move the money stolen through these fraudulent activities.
In a separate paper released with CIBI Information Inc. titled “Mule hunting: Are we chasing ghosts?” IDfy said the Philippines risks losing up to P603 billion annually, or nearly three percent of gross domestic product, to fraud perpetrated through mule accounts.
Crucially, with fewer than two percent of cybercrimes formally reported, mule accounts frequently remain active and reusable for months, IDfy said.
Unless we crack down on these operations and toughen up against the perpetrators and their Filipino partners in crime, Manila may end up being the region’s scam capital.
From POGOs to PIGOs
Aside from scams, another concern that has emerged in the wake of the POGO ban is the so-called Philippine Inland Gaming Operators (PIGOs), which offer online gaming targeting players in the Philippines.
It’s ironic, said property consultant David Leechiu, that while the Philippines banned POGOs – which target overseas players – it allows PIGOs, which have, unfortunately, hooked Filipinos on online gambling.
Leechiu was among those who strongly supported POGOs because of the industry’s ripple effect on the economy – from boosting office and residential space to supporting consumer spending.
PIGOs have no such similar trickle-down effect on the economy.
Through these PIGOs, industry sources said, Filipinos, especially the poorest of the poor, have gotten hooked on online gambling, betting whatever earnings they make in a day, including the occasional ayuda.
Sen. Chiz Escudero said last year that this new industry needs to be scrutinized, saying that online bets have reached a trillion.
We banned POGOs supposedly because of the social cost. But their successors are proving to be worse.
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