Pogos must go; give them 3 months – Senate panel

GAME OVER? | Senate panel says crimes such as human trafficking are part of the social cost of hosting Philippine offshore gaming operators (Pogos). This photo, which was taken on June 27, 2023, shows a gaming room at an illegal Pogo hub in Las Piñas City, where authorities rescued some 2,000 workers. (File photo by MARIANNE BERMUDEZ / Philippine Daily Inquirer)

MANILA, Philippines — The Senate Committee on Ways and Means recommends a three-month phaseout of Philippine offshore gaming operators (Pogos) and the adoption of measures that would stem the job losses that would be caused by such a move.

In its 120-page report submitted on Tuesday evening for plenary approval, the Senate panel also sought the collection of taxes due from Pogo firms and the deportation of thousands of foreign Pogo workers, most of whom are Chinese.

“Premises considered, the [committee] believes that even without Pogos, the Philippine economy will continue to thrive,” the report noted.

Speaking to reporters on Wednesday, Sen. Sherwin Gatchalian expressed relief that the committee report finally obtained 10 signatures — a majority of the 18 members.

“First of all, we have seen that the impact [of Pogos] on our economy is not that big if they leave. We have seen that they contribute less than 1 percent [to] our [gross domestic product], less than 1 percent [to] our [tax] collections,” he added.

The senators who signed the committee report included Gatchalian, Senate President Pro-Tempore Loren Legarda, Senate Majority Leader Joel Villanueva, Senate Minority Leader Aquilino Pimentel III, and Sens. Ronald dela Rosa, Grace Poe, Raffy Tulfo, Risa Hontiveros, JV Ejercito and Pia Cayetano.

The committee members who did not sign the report were Sens. Juan Edgardo Angara (who sits as vice chair), Jinggoy Estrada, Christopher Lawrence Go, Francis Tolentino, Nancy Binay, Francis Escudero, Lito Lapid, Imee Marcos, Robinhood Padilla, and Mark and Cynthia Villar.

Social cost

The submission of the committee report suffered months of delay as it lacked the needed signatures of a majority of the members to allow it to be submitted to the Senate plenary for approval.

The committee report represents a watered-down version of the original chair’s report, which Gatchalian delivered in March, that called for an immediate total ban on Pogos.

“My original recommendation was for a total ban, but there were other senators who preferred a [gradual] phaseout, which would become the subject of our debates once it reaches the plenary,” he said.

The Senate plenary would just need to decide whether it would recommend an immediate or a gradual phaseout, Gatchalian noted.

According to the report, the series of hearings the committee conducted on the social costs of Pogos showed that the ills they had caused outweighed the economic benefits.

“It is worthy to note that gambling in general has been inherently associated with crime. This poses a reputational risk for the Philippines that can affect [its] business and investment climate,” the report said.

It cited a Philippine National Police report, which recorded 99 Pogo-related criminal activities from January 2017 to Sept. 30, 2022, with 30 cases of kidnap-for-ransom, 13 cases of cybercrimes, 12 cases of human trafficking, and 10 cases of serious illegal detention.

In addition, the economic benefits from Pogos were “overrated, moderate [and] erratic,” the report said.

Recommendations

It said Global ComRCI, the designated third-party auditor of Pogo operations, also lacked credibility and other technical, financial, and legal qualifications.

The sole gaming regulator, Philippine Amusement and Gaming Corp. (Pagcor), also suffers from conflict of interest because of its role as both gaming operator and regulator, the report pointed out. “Despite (Anti-Money Laundering Council’s) recommendations to revoke the license of [erring] Pogos, Pagcor has not acted on it.”

The committee report urged Congress to pass legislation that would separate the functions of regulation from operation in Pagcor’s charter.

“It is recommended that a new entity be created to perform solely regulatory functions, authorization and licensing of games of chance and other forms of gambling, while Pagcor becomes solely as a gaming operator,” the report said.

It also urged the Senate blue ribbon committee to conduct an investigation into the possible criminal liability of Pagcor officials in the supposedly anomalous selection of its third-party auditor, and for the Bureau of Internal Revenue to review the tax liabilities of Pogo firms.

The committee also urged the Department of Labor and Employment to look for alternative jobs for Filipinos who might be displaced by a Pogo phaseout.

Phasing out Pogos is not expected to significantly impact the office market as demand for this sector has already become tepid since the exit of many of them during the pandemic, according to property consultancy firm Colliers Philippines.

“The take-up of Pogos now is much less compared to prepandemic. It is not as substantial,” Colliers Philippines research head Joey Roi Bondoc told the Inquirer on Wednesday.

In the first half, Bondoc noted that Pogos occupied 55,000 square meters of office space mostly in the Bay Area, down from 300,000 sqm yearly from 2017 to 2019.

Bondoc noted that most of the office spaces in the market were being leased out by business process outsourcing and traditional companies right now.

—WITH A REPORT FROM TYRONE JASPER C. PIAD