Anti-Pogo clamor grows for President Marcos’ action

Chinese Pogo workers composite image from Inquirer file and stock photos

MANILA, Philippines — The chorus of opposition to Philippine-based Chinese-run offshore gaming operations is growing louder with business associations, economic think tanks, and political groups joining calls for a ban on the industry that thrived during the Duterte administration.

The opponents of the Philippine offshore gaming operators (Pogos) say the negative impact of this particular gaming industry on society far outweighs any of their so-called economic benefits.

READ: Senators wish for Marcos to tackle Pogo ban in Sona

In a joint statement on Wednesday, Makati Business Club, Financial Executives Institute of the Philippines and Management Association of the Philippines said they “fully support” the recommendations of the Department of Finance (DOF) and the National Economic and Development Authority (Neda) to ban Pogos.

Mere 0.2% contribution

The statement also was signed by Foundation for Economic Freedom, Justice Reform Initiative and the University of the Philippines School of Economics Alumni Association.

READ: Pagcor won’t oppose Marcos, Congress if they decide to ban Pogo – Tengco

They said the Pogos’ contribution to the Philippines in 2023 was only 0.2 percent of the gross domestic product, which is the sum of goods and services produced in the country within a given period.

“Compare this to the social costs which have direct effects on economic growth,” read their joint statement.

They highlighted findings from recent Senate hearings and statements by Neda that linked Pogos to negative “externalities,” citing in particular the involvement of Pogo personalities in crimes such as human trafficking, kidnapping and money laundering, among others.

PNP data

They pointed to 2022 data from the Philippine National Police showing that 55 percent of 31 cases of kidnappings were Pogo-related.

“The crimes related to Pogo investments can hinder growth, affect investor perception, and potentially affect our bilateral and multilateral relations,” they said.

“This said, the government should also help, reskill, and ensure opportunities for Filipino workers who may lose their jobs due to the ban and allow industries affected by Pogos to find alternative uses for their assets,” the joint statement said.

A similar statement was made last year by Sen. Sherwin Gatchalian, who is one of the senators pushing the inquiry into Pogos in hearings called by Sen. Risa Hontiveros’ committee on women, children, family relations and gender equality.

Gatchalian last year said that the increasing involvement of individuals linked to Pogos in various crimes, including human trafficking, could dampen tourist arrivals in the country.

Pagcor’s ‘violation’

Several prominent Filipino citizens and organizations led by retired Supreme Court Justices Antonio Carpio and Conchita Carpio Morales, a former Ombudsman, have also appealed to President Ferdinand Marcos Jr. to immediately cancel Pogo licenses.

In a July 16 open letter, they cited several grounds for their recommendation, including a statement from the Chinese Embassy in Manila declaring that “any form of gambling, including online gambling and overseas gambling by Chinese citizens, is illegal” under Chinese law.

They said that the government’s gaming regulator, Philippine Amusement and Gaming Corp. (Pagcor), violated its regulations when it granted licenses to Pogos.

Pagcor’s Internet Gaming Regulations of July 12, 2023, stated that it is “the responsibility of the licensee to ensure that the targeting of any games to players based in any jurisdiction is so targeted in full compliance with the laws of that jurisdiction.”

In other words, Pogos that were granted licenses by Pagcor should comply with the laws of China. Pogos cater almost exclusively to Chinese citizens.

Concerns over crime

The open letter also highlighted concerns about criminal activities associated with Pogos.

“As shown by recent developments, Chinese Pogos are mostly operated by criminal syndicates,” the open letter said, adding that these gaming companies allegedly have their own jails, torture chambers and hospitals. Their personnel also allegedly illegally possess firearms, use fake documents, engage in sex trafficking, do not pay taxes and bribe officials, it added.

It urged Marcos to order Pagcor to “cancel immediately all licenses of Pogos that cater to the mainland Chinese market.”

Aside from Carpio and Morales, the others who signed the open letter were former Sen. Leila de Lima, former Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo, former Commission on Audit Commissioner Heidi Mendoza and retired Rear Adm. Rommel Jude Ong.

The others were leaders of EveryWoman, Women2022, Intercessors for the Philippines, Akbayan Party, Akbayan Youth, Active Citizenship Foundation Inc., Student Council Alliance of the Philippines and Pambansang Katipunan ng mga Samahan sa Kanayunan.

UP College of Law

An identical open letter was issued on July 15 by the Class of 1975 of the University of the Philippines College of Law to which Carpio belongs.

Pagcor chief Alejandro Tengco said he favored shutting down only the illegal Pogos, citing government earnings of P5.2 billion last year from 48 legitimate operators. Pogo revenues account for 5 percent or 6 percent of Pagcor’s earnings, he said.

Tengco said closing down all Pogos will result in significant job losses.

In February 2020, Sen. Joel Villanueva said that, according to Pagcor, 17.7 percent of Pogo workers were Filipinos, while 82.3 percent were foreigners as of December 2019.

In addition, Pagcor reported that out of 243 Pogo-related establishments in the country, only 153 hire Filipino workers, and of the 10 biggest Pogo licensees, six companies had less than 5 percent Filipino workers.

In October 2022, the Association of Service Providers of Pogos (Aspap) said that the industry had 11,776 direct-hire Filipino employees and 11,342 indirect hires.

Aspap spokesperson Michael Danganan said these figures excluded the numerous jobs supported by Pogos, like the food and beverage industry and other sectors that benefit from Pogos.

In January 2023, the Department of Labor and Employment said that some 25,000 workers might find themselves jobless should Congress enact legislation banning Pogos.

According to the DOF, the government’s tax intake from Pogos ballooned by 127 percent to P8.88 billion in 2022 from P3.91 billion in 2021, despite their declining presence due partly to the pandemic.

At the height of their operation in 2019, there were over 300 licensed Pogos, generating over P7 billion in license fees.

The online gaming industry expanded rapidly during the Duterte administration, taking advantage of the Philippines’ liberal gaming laws.

In justifying continued Pogo operations in September 2019, then-President Rodrigo Duterte said shutting them down would cause job and revenue losses.

Then Defense Secretary Delfin Lorenzana said that Pogo hubs, particularly those near military camps, could easily shift their activities to spying for China.

He cited the former Island Cove in Kawit, Cavite province, which is now a Pogo enclave a few kilometers from a military base at Sangley Point. —with a report from Inquirer Research