Marcos’ gambit: Decision awaits on POGOs’ future

Days before his 2024 State of the Nation Address (SONA) on July 22, President Ferdinand “Bongbong” Marcos Jr. vowed that his administration is focused on eradicating criminality, specifically the operation of illegal Philippine Offshore Gaming Operator (POGO) hubs in the country.

This, however, was only one of the few remarks made by the President on POGOs amid calls for their total ban.

During his presidential campaign in 2022, Marcos made no mention or promises regarding the industry, election data gathered by GMA Integrated News Research showed.

His first public pronouncement against POGOs came in January 2023, nearly seven months after he was sworn into office. At the time, Marcos said that POGOs might no longer be worth allowing if they bring a social cost to the Philippines, considering the crimes linked to them.

“I don’t know what would be the point. It’s not a huge part of our economy. And if it’s adjudged that there is a social cost, it might not be worth it. The cost might not be worth what they’re paying in taxes anymore,” Marcos had said.

Amid these pronouncements, the President has yet to announce his decision regarding a possible total POGO ban.

High stakes

The stakes are high when it comes to Marcos’ decision on the future of POGOs, arguably a goose that lays a golden egg for the cash-strapped government.

Finance Secretary Ralph Recto has already recommended in writing to the President the halt of operations of POGOs, given the recent issues surrounding the industry.

Just a day before Recto announced that he submitted the letter, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said the Marcos Cabinet has yet to discuss the calls to ban POGO.

However, Balisacan has also expressed support for the ban on POGOs despite a potential revenue loss amounting to P20 billion.

In October 2022, Finance Undersecretary Bayani Agabin said the country can recover the potential losses from the exit of POGOs in other industries with "high value added."

Loss of revenues, jobs

A ban would potentially put a dent on the bottom line of the Philippine Amusement and Gaming Corp. (PAGCOR), the government regulator mandated to ensure that only those with valid gambling licenses are allowed to operate.

This July, PAGCOR said its net income climbed 121.48% to P6.56 billion from P2.96 billion the same period in 2023, as its gross gaming revenue (GGR) jumped 19.21% to P194.743 billion and gross revenues increased 42.92% to P51.76 billion.

Real estate services firm Leechiu Property Consultants earlier said that the country stands to lose over P100 billion should the POGO industry be forced out of the country.

The Association of Service Providers and POGOs (ASAP), for its part, also warned that some 23,000 Filipinos would lose their jobs if the operators are banned from the country.

While it has claimed to be tightening the noose on illegal operators, PAGCOR said outlawing Internet Gaming Licensees (IGLs), formerly known as POGOs, could cause more harm than good as it would drive legitimate operators underground.

Last June, PAGCOR Chairman and CEO Alejandro Tengco said that the current administration has been doing its part to weed out illegal operators, resulting in the significant decrease in the number of licensees from 298 during the previous administration to only 43 licensees.

Time to act

According to an October 2022 study of the Philippine Institute for Development Studies (PIDS), the government’s decision on whether or not operators should be banned must be made immediately as the economy becomes reliant on the POGO industry.

“At this stage, where a less costly reset is possible, curtailing POGO operations would have a (relatively) limited effect on the property sector and the financial system, with lower exposure of credit institutions to the online gaming industry,” PIDS said.

The study PIDS found that the social costs of POGOs outnumber its economic gains. Expanding or promoting the POGO sector to maximize its benefits, PIDS said, exposes the country to increased risks of abrupt reversal of capital as well as social, governance, and reputational risks.

Meanwhile, PIDS said that should POGO activity be allowed to continue, the government must strengthen law enforcement and immigration control to address rising criminality related to POGOs.

It must also reconcile POGO with foreign policy, clarify the role of PAGCOR, and build capacity to regulate the online industry.

“A large amount of investment in technology will be needed to arm the assigned regulator of POGO, given the sophisticated nature of the online gaming business,” it said.

Crime haven

For its part, the Chinese Embassy has also said that POGOs should be outlawed in the country as they have become havens for various crimes.

Recto had said that the illegal activities being conducted by several POGO companies, such as those in Bamban, Tarlac and in Porac, Pampanga, influenced his decision to recommend the ban to the President.

To recall, authorities rescued more than 800 Filipinos and foreign nationals at a large POGO firm in Bamban, Tarlac after it was raided for alleged illegal activities that include crypto and love scams in March.

The raid has led senators to question suspended Bamban Mayor Alice Guo over her alleged links to the POGO hub as well as her identity as a Filipino citizen.

Authorities have filed a complaint against Guo and 13 others for violation of Sections 4 and 6 of Republic Act (RA) 9208 or the Anti-Trafficking in Persons Act of 2003 as amended by RA 10364, as further amended by RA 11862.

Guo was also referred to as “a.k.a Guo Hua Ping” in the complaint. The National Bureau of Investigation has found that Guo and Chinese passport holder Guo Hua Ping have the same fingerprints.

Guo, for her part, has denied the allegations against her.

Authorities also raided a POGO hub in Porac, Pampanga, another hub linked to Guo, and rescued 158 Chinese, Vietnamese, and Malaysian nationals.

Breeding ground

Aside from being a haven for various crimes, concerns have also been raised that POGOs have insiders in government agencies, breeding corruption.

According to Senator Sherwin Gatchalian, the raid of the Porac POGO hub showed the possible influence of Chinese syndicates on the judiciary.

This was because the raid only led to the arrest of 158 foreigners when authorities expected to arrest more than 1,000, but information regarding the operation may have been leaked. Gatchalian said that the illegal POGO operators were apparently tipped when the Presidential Anti-Organized Crime Commission (PAOCC) filed a search warrant.

This prompted the Supreme Court to launch an investigation on the allegations. The High Court also created a channel where the public can send information on violations of corruption laws and ethics involving justices, judges, and court personnel.

Fighting the corrupt

Marcos, as he has spoken sparingly on POGOs, has yet to comment on the industry’s malignant influence on the state.

However, the President has spoken against corruption in government.

In November 2022, Marcos urged career government executives to “be vigilant against temptation and corruption and other acts that diminish the public trust.”

One of the more notable remarks was during his 2023 SONA, where Marcos said that he would not tolerate corruption or incompetence in government. This was over the involvement of some police officers in the 990-kilogram shabu haul, amounting to P6.7 billion, in Manila in October in 2022.

Among the solutions he presented to eliminiate the "dreaded and corrosive social curse" included digitalization as well as employing individuals with “unquestionable integrity.”

"We cannot tolerate corruption or incompetence in government,” the President said

More recently, Marcos said that dishonest officials have no place in the government, especially those involved in corrupt and illicit activities.

“Bawal ang mga hindi tapat at nangungulimbat. Kapag pera ng bayan ang nawala dahil sa katiwalian, ang mga taong paglalaanan sana ng pondong naglaho ay nananakawan,” Marcos said. 

(Individuals who are dishonest and plunder are not allowed. When public funds are lost due to corruption, funds are stolen from individuals who should have received them.)

Survey says…

A recent Pulse Asia poll revealed that the administration’s efforts at fighting graft and corruption in government had a 39% disapproval rating.

Meanwhile, the poll also showed that 22% of Filipinos were concerned about fighting graft and corruption.

The June 2024 Pulse Asia poll used face-to-face interviews with 2,400 respondents aged 18 years old and above.

It had a ± 2% error margin at a 95% confidence level. – VDV, GMA Integrated News