Let’s give it to President Ferdinand Marcos, Jr. that indeed “the hard lesson of this last year has made it clear that whatever current data proudly bannering our country as among the best-performing in Asia, means nothing to a Filipino, who is confronted by the price of rice at 45 to 65 pesos per kilo.”
We hope the President succeeds in rallying his fellow public servants to actually muster a whole-of-government strategy and execute it to once and for all bring down the price of rice closer to his campaign promise, and those of the other basic commodities. His rhetoric will truly connect to us. More Filipino citizenry will be buying into his pronouncements with firm conviction. On the other hand, we can only imagine the cost of failure.
In the same spirit, the perceived benefits of POGO (Philippine Offshore Gaming Operators) operations in the Philippines in the billions of pesos in public revenues and nearly half a million jobs created also mean nothing to a Filipino because these on-line gambling operations, “disguising themselves as legitimate entities,” have ventured into elicit areas furthest from gaming, such as “financial scamming, money laundering, prostitution, human trafficking, kidnapping, brutal torture — even murder.” For this reason, it was correct for the President to have directed the total ban on all POGOs in the Philippines. PAGCOR (Philippine Amusement and Gaming Corp.) should have no choice but to implement the presidential order “to wind down and cease the operations of POGOs by the end of the year.”
The applause was deafening, that part of the SONA received a standing ovation.
We are all for it, and as one netizen uploaded his message on the POGO ban: “Wala nang bawian, ha!” (No take-backs.)
Tuloy tuloy na ba ito? (Will this push through?)
Marcos’ directive strikes at the very heart of the POGOs because those that cater mainly to the Chinese market are in the first place illegal. As pointed out by the open letter of 1Sambayan to the President on July 16, a week before the SONA, China through its embassy here declared that “any form of gambling, including online gambling and overseas gambling by Chinese citizen is illegal.”
As such, granting a license to this type of POGOs violates PAGCOR’s own regulations. Under PAGCOR’s Regulation 2, 1Sambayan clarified, licensing of offshore POGOs which websites are accessed within the Philippines or in territories where online gambling is not allowed, is prohibited. In short, PAGCOR requires every offshore operator to cater only to foreign countries where gambling is allowed. A license from their home countries is needed. Since China prohibits gambling, they cannot produce this document and therefore PAGCOR’s license is void.
Nobody knows if the other POGOs owned and operated by non-residents are compliant with such PAGCOR requirements. If PAGCOR missed this prerequisite, there is no guarantee PAGCOR was more than diligent with the others.
The total ban is therefore logical.
Marcos enjoys popular support in this policy reversal on POGOs. 1Sambayan sent an open letter to the President recommending the immediate cancellation of licenses to operate POGOs that cater mainly to the Chinese market. Several business groups supported the economic managers’ recommendation for a total ban of POGOs. They include the Makati Business Club, Alyansa Agrikultura, the Financial Executives Institute of the Philippines, the Foundation for Economic Freedom, the Institute of Corporate Directors, the Justice Reform Initiative, the Management Association of the Philippines, and the UP School of Economics Alumni Association. Other religious and civic groups are also supportive.
They all argued that the contributions of POGOs to the Philippine economy is minimal but with great social cost based on POGOs’ involvement in criminal activities such as human trafficking, kidnapping, money laundering, torture and even slavery. Philippine National Police data shows that more than half of the 31 reported cases of kidnappings in 2022, for instance, were POGO-related. There should be no love lost in the quality of employment in these POGO establishments. Catering to the gambling industry is not the way to help build a strong economy.
More evidence of POGOs’ involvement in criminal activities was brought to light during the Senate investigation of Bamban, Tarlac Mayor Alice Guo and her involvement in Baofu’s Zun Yuan Technology, Inc., a shady POGO operator. This POGO employed nearly 700 workers of different nationalities including Filipinos, Chinese, Vietnamese, Malaysians, Rwandans, Indonesians, Taiwanese, and Kyrgyz. The raid by combined police and military forces discovered that the offshore operators were engaged in cybercrimes, qualified human trafficking, a pork barrel scam, and money laundering, among others.
Claiming she was of modest means and origin, Mayor Guo protested the decision of the Court of Appeals to freeze her assets and those of her associates. Freeze orders covered assets consisting of 90 bank accounts across 14 financial institutions, several real estate properties, and high-value personal properties such as luxury and sports vehicles and a helicopter. This freeze order was issued to prevent the dissipation of such assets should the case drag. The Bamban mayor was also suspended based on a graft complaint filed against her by the Department of the Interior and Local Government.
To be sure, the President’s directive is predated by a bill filed by Senator Sherwin Gatchalian in May which sought to repeal the taxability of POGOs pursuant to RA 11590, “the only law that acknowledges and legitimizes POGO operations in the Philippines.” This bill outlaws and prohibits offshore gaming operations. The senator invoked various police raids that proved POGOs were indeed involved in various criminal activities.
Finance department data also supports the bill. The economic benefits cited were in the vicinity of around P140 billion annually, but this could be overshadowed by the reputational cost of foregone potential investments and tourism revenues of about P148 billion. Law enforcement also comes at a cost. Thus, net gain is not even a fraction of GDP.
It’s a sad commentary that without the President’s decision to eliminate POGOs, measures with the same intent pending in the House of Representatives could have gathered dust forever. An enabling law, just like the Gatchalian proposal, should cover “all bases,” if this is to be a legacy of the President. It took House Speaker Martin Romualdez’ push to get the bills previously filed by Manila’s Rep. Benny Abante, Cagayan de Oro’s Rufus Rodriguez, and the Makabayan bloc out of the House’s games and amusements committee into a consolidated bill.
What is the wild card in this POGO story?
Some quarters have suggested using the Bamban mayor to flush out the bigger fish on the food chain. Unless she cooperates, the Presidential Anti-Organized Crime Commission (PAOCC) is not likely to qualify her as state witness. PAOCC seems to maintain its position that Guo is “the highest so far sa mga identified natin, hawak natin (the highest so far of those we have identified, that have a hold of).”
What is difficult to explain is how, in the first place, Mayor Guo suddenly appeared in Tarlac, gained Filipino citizenship, operated the biggest POGO in the Philippines, accumulated a vast amount of wealth and resources, and won the mayoralty election. Somebody high up on the food chain, or in the Philippine Government’s bureaucracy, must have given all the green lights in documenting her birth in the Philippines, granting her citizenship, securing the license to operate a POGO, eluding internal revenue assessment, and filing her certificate of candidacy.
Suddenly, everyone woke up clueless about how it all happened.
And we are seeing the start of a pushback. PAGCOR has been reported to be requesting that “12 POGO companies be spared from the nationwide ban.” Their action is as ludicrous as someone proposing to spare a prostitution house from prosecution because it is only part of an elaborate business empire, and that prostitutes and pimps depend on it for their livelihood. “PAGCOR made the appeal since 12 of the 43 POGO companies in the country are merely customer service agents for gaming companies.”
Some members of Congress have also expressed that there is a distinction between POGOs and IGLs or internet gaming licenses. But PAGCOR itself admitted that IGL is just another name for POGO, and that POGOs and IGLs are one and the same. Senate President Chiz Escudero’s point should be the guiding principle: “… if the government really wanted to ban gambling in the country, it must cover all its forms… whether it’s POGO, PIGO, or casinos — let’s ban them altogether if we truly believe that they are not doing any good for our society and our fellow citizens.”
Let’s not just be embroiled in the pluses and minuses of POGOs; it would become data dependent. Gambling is gambling, and if it is used to front for other criminal activities, by all means, let the President’s directive be implemented.
To see how this issue could proceed from here, we should recall what happened in the Senate last year when the bill on the proposed permanent ban of POGO was discussed at the Ways and Means Committee. One lady senator, in explaining her vote, said: “What I’m afraid of is that it will just get through because we know big people are behind POGO. Not only big people in the syndicate but in our government.” (Inquirer.net, Sept. 20, 2023).
Is the die cast?
Diwa C. Guinigundo is the former deputy governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was alternate executive director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.