Drilon eyes earmarking P50B unpaid taxes of POGOs for COVID-19 response

MANILA, Philippines — Senate Minority Franklin Drilon is seeking an amendment to the proposed “Bayanihan 2” that would earmark the billions of unpaid taxes of Philippine offshore gaming operators (POGOs) for the government’s COVID-19 response.

The chamber is currently tackling Senate Bill No. 1564 which seeks to authorize the President to “exercise necessary powers” to respond to the health crisis and to provide a “mechanism” to “accelerate the recovery and bolster the resiliency of the Philippine economy.”

During the interpellation of the measure on Tuesday, Drilon inquired about the status of the government’s collection of the estimated P50-billion in withholding income and franchise taxes, which the majority of the licensed POGOs failed to pay in 2019.

“I’m just interested in the answer of the P50 billion which are unpaid taxes of the POGO sector because that is a source of funding that would help us achieve our interventions,” Drilon said.

“The purpose actually is for a proposed amendment later on, which we will introduce, which will earmark this unpaid taxes for the activities and programs that we are proposing in this law (Bayanihan 2) to be funded,” he added.

“In other words, we earmark these funds solely for this purpose of funding the programs, activities under the proposed measure to address our COVID19 situation,” he further said.

The senator said that his proposed amendment would also “clearly” provide that no POGOs will be allowed to operate “unless these taxes are collected.”

In May, the country’s COVID-19 task force allowed POGOs to partially resume their operations, although the Bureau of Internal Revenue later asked them to settle first their tax obligations.

This decision, however, received widespread condemnation of the POGO industry linked to various crimes as well as tax issues.

During a hearing of the Senate labor committee in February, an official from the Bureau of Internal Revenue (BIR) said that Pogos in the country have yet to pay an estimated P50 billion in fees and taxes.

The same hearing also revealed that many of the Pogo workers in the country have yet to secure tax identification numbers (TINs).

In another inquiry earlier conducted by the Senate blue ribbon committee, the Anti-Money Laundering Council (AMLC) told senators that P14 billion of the P54 billion in transactions by Pogos from 2017 to 2019 were linked to “suspicious activities.”

Figures presented by AMLC Executive Director Mel Racela during the hearing also showed that around P138 million in Pogo transactions were linked to drug trafficking.

Lawmakers also raised concerns on the health risk posed by allowing POGOs to operate amid a pandemic.