Dominguez: Some POGOs ‘canceling’ PH lease contracts ‘for lack of business’

MANILA, Philippines — Due to lack of business and with China “clamping down” on money transfers, some Philippine offshore Gaming operators (POGOs) have started “canceling” their lease contracts in the Philippines, Finance Secretary Carlos Dominguez III told senators on Wednesday.

During the Senate deliberations on the proposed budget of the Department of Finance (DOF) for 2021, Dominguez said he received a call from one of the owners of a building in Makati that his POGO and service provider clients have been abandoning their lease contracts.

“His POGO and service provider clients have started canceling their lease of contracts for lack of business…lack of operators,” the finance chief said.

“I think the Chinese government is clamping down on money transfers, I think the [Chinese government] also started canceling passports of those people servicing the POGO industry,” he added.

This was disclosed after Senate Minority Leader Franklin Drilon asked Dominguez on the projected revenues the government can earn with the revised computation of the franchise tax collected from POGOs under the Bayanihan to Recover as One Act.

READ: POGO taxes eyed as fund source for COVID-19 response

Dominguez was not able to give a specific amount but assured that the DOF will provide the Senate with the projected figures as soon it becomes available.

“We are doing our due diligence and taking the estimates so I don’t have those numbers immediately but I can provide it to you as soon as it’s available,” the finance secretary said.

In June, the Philippine Amusement and Gaming Corp. (Pagcor) reported a looming POGO “exodus” due to tax issues. This, after Macau-based Suncity Group, the world’s largest junket operator, closed down its POGO unit in the country.

A second company, Don Tencess Asian Solutions, has also earlier informed Pagcor that it intends to close its POGO unit in the country.

READ: Wave of POGO closures seen after world’s largest operator folds up PH unit

The POGO industry has been linked to various crimes as well as tax issues.

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

It was also revealed in the same hearing that many POGO workers have yet to secure tax identification numbers.

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

AMLC Executive Director Mel Racela presented during the hearing figures showing that around P138 million in POGO transactions were linked to drug trafficking.

KGA