Gatchalian: We don’t need POGOs

After two Senate hearings on the costs and benefits of the Philippine Offshore Gaming Operators (POGO), Senator Sherwin Gatchalian said he believes the offshore gaming industry should be banned in the Philippines.

"My own assessment, hindi natin kailangan ang POGO dahil ang crime, eh hindi natin matanggal sa POGO at ang conviction [rate] mababa. So kung ang conviction natin mababa, kapag mag-o-operate pa sila in the next five years, makaaasa pa tayo ang crime andyan pa rin," Gatchalian told reporters in an interview.

(My own assessment is we don't need POGOs because you can't remove crime [linked to them] and the conviction rate is low. So if the conviction rate is low, if they are allowed to operate another five years, we can be assured that the crime will also be there.)

He said one of the recommendations that the Senate Ways and Means Committee might raise to President Ferdinand "Bongbong" Marcos Jr. is to "transition out of POGO" and invite the business process outsourcing (BPO) industry to replace the space" of the offshore gaming industry.

"For example, 'yung renta sa office, mawawala nga sila mga one million square meters ang mawawala pero mapapalit naman ang BPO... Nakita ko in the short term may mawawala talaga pero hindi imposibleng palitan siya dahil may BPO industry," he said.

(For example, they will lose office rent for one million square meters, but POGOs can be replaced by BPOs...I see in the short term there will be losses, but it's not impossible that they could be replaced because there is the BPO industry.)

"So kanina nakita namin ang datos at facts at yun ang importante dahil nga importante na alam natin kung ano ang mawawala. I'm not going to hide and say na walang mawawala sa atin. May mawawala sa atin that's P30 billion pero hindi siya imposibleng palitan. So yun ang nakikita naman naming anggulo," he added.

(So we saw the data and the facts, and these are important because it's important that we know what's going to be lost. I'm not going to hide and not say we're not going to lose anything. We will lose P30 billion, but it's not impossible to replace that. That's the angle we're seeing.)

The lawmaker estimated that POGOs' direct and indirect contribution to the country’s gross domestic product (GDP) is only one percent.

He said POGOs contribute P34.68 billion to the Philippine economy, including  P10.188 billion in real estate taxes, P7.465 billion in taxes on retail stores selling household items, communications devices and other goods, and P7.260 billion representing the sector’s 5% franchise tax.

The POGOs' contribution also includes P3.07 billion in 25% withholding tax for foreign nationals, P1.78 billion in value-added tax (VAT), P1.683 billion in tax on food service activities, P1.58 billion in remittances to national government, P1.41 billion in foregone tax on utilities, P232 million in corporate income tax, and P4.312 million in income tax.

Finance Undersecretary Bayani Agabin said the 1% effect on GDP is “quite big and a cause for concern.”

However, the Finance official said that the Philippines can recover the potential losses should the country do away with offshore gaming operators. — BM, GMA News