Philippines stuck in POGO quandary

By Beting Laygo Dolor, Editor

MANILA – The country is stuck between the proverbial rock and a hard place where Philippine Overseas Gaming Operations or POGOs are concerned.

While there have been widespread calls to shut down all POGOs because they have become synonymous with such crimes as kidnapping, loan sharking, and prostitution, the country also stands to lose billions in earnings as well as thousands of jobs in an economy not yet fully recovered from the effects of the global pandemic.

Lawmakers and Cabinet secretaries have cited the negative social effects of allowing the online gambling companies to continue operating in the country.

Although almost all are owned by Chinese nationals and employ more of their fellow Chinese than Filipinos, the People’s Republic of China has given the government the biggest reason to close all POGOs.

The gaming companies are not only banned in China but their continued presence in the Philippines has caused it to be blacklisted as a tourist site.

Senate President Migz Zubiri told local media on Tuesday, October 11 (Manila time) that he had spoken with Chinese ambassador to Manila Huang Xilian who told him that the Philippines had been placed under Beijing’s blacklist of travel destinations due to the numerous issues besetting the POGO industry.

As such, the envoy said Chinese “are discouraged from visiting the Philippines.”

Huang, however, appeared to backtrack on his statement, with the Chinese embassy issuing a statement denying that the Philippines had been blacklisted as a travel destination and saying that the Senate President had spread “misinformation.”

Zubiri, however, stood by his claim and said two other senators were witness to the envoy’s statement, namely Sherwin Gatchalian and Robin Padilla.

Gatchalian said the Foreign Affairs and Tourism departments “should engage China in this respect” in order to clear the air.

Zubiri said Huang told him they were concerned if their nationals “will be safe from illegal activities being done by the triad, by the syndicates operating POGOs.”

Already, the country has seen a “significant drop” in Chinese tours.

Prior to the pandemic, some 1.74 million Chinese tourists had been visiting the country, providing a huge boost to the tourism industry.

This year, less than 23,000 Chinese tourists have visited the country, but this could be because China has all but stopped its citizens from traveling abroad unless absolutely necessary.

Senators such as Grace Poe and Koko Pimentel had warned against allowing POGOs to continue operating as they posed a “danger” to society. But Gatchalian said the administration should consider the P34.68 billion (almost $600 million) that POGOs directly or indirectly pumped into the economy.

The figure represents one percent of the country’s gross domestic product.

“Would one percent be a significant negative negative effect on the economy?” he asked during a Senate hearing on POGO operations.

Finance undersecretary Bayani Agabin admitted that losing one percent of GDP would be “a cause for concern.”

Agabin, however, echoed the stand of Finance Secretary Benjamin Diokno that shutting down all POGOs would also result in a hike in foreign investments as well as provide a boost in tourist arrivals.

Also favoring the closure of the POGO industry is Socioeconomic Planning Secretary Arsenio Balisacan, who has said that the Philippines stands more to lose than to gain in allowing the gaming operations to continue to do business in the Philippines.

A strong voice in the House of Representatives supportive of POGOs is Rep. Joey Salceda, chairman of the Ways and Means committee, who said closing the industry down would only drive them underground.

Salceda also said on several occasions that closing down all POGOs would be tantamount to “courting legal disaster.”

The government would, in effect, be impairing legal contracts as well as stepping on the rights of legitimate businesses, he said.

Salceda estimated that POGOs contribute P128 billion ($2.206 billion) in economic activity.

A total ban on POGOs “is burning a house to kill a rat that isn’t even in the house in the first place,” he said.

The sole organization which includes POGOs, the Association of Service Providers and POGOs, said more than 23,000 Filipinos stand to lose their livelihood if the business is banned.

They asked that legitimate POGO firms be allowed to continue to do business in the country.

The single biggest loser should the industry be forced to shut down would be real estate, which earns P19 billion ($327 million) in rental income and accounts for P10.188 billion ($174 million) in real estate taxes.

Beginning with a few hundred at the start of this month, the Bureau of Immigration is set to deport an estimated 48,000 unlicensed foreign POGO workers, the overwhelming majority of whom are Chinese.

The Senate will hold one more hearing on the matter before deciding what their proposal to the Marcos administration will be.

POGOs were set up in the Philippines during the Duterte administration, which pivoted towards China and away from its traditional allies like the US.