MANILA, Philippines — The contribution of Philippine offshore gaming operators (POGOs)
to the economy is expected to remain this year, prompting the economic team and
lawmakers to permanently ban the industry.
During the House Committee on Games and Amusements hearing on Tuesday, the
Department of Finance (DOF) and the National Economic and Development Authority
(NEDA) both supported the bill and resolution banning POGOs and declaring it as illegal.
NEDA assistant secretary Sarah Lynne Daway-Ducanes argued that the potential
negative impact of POGOs outweigh the minimal economic contribution of its continued
operation.
Estimates showed that the POGO industry’s contribution to gross domestic product (GDP)
continues to be negligible and will remain at around 0.2 percent for this year.
This is slightly below the 0.3 percent last year and is a further decline from the 0.7 percent
contribution to GDP during the POGO peak in 2019.
Daway-Ducanes also emphasized that maintaining POGOs places the country at risk of
being included in China’s blacklist of tourist destinations with the Philippines eventually
losing Chinese tourists.
“Chinese tourists dwindled due to the pandemic and we aim to raise this substantially
especially that we are banking on tourism as one of the main drivers of growth in the
medium term,” Daway-Ducanes said.
If POGOs continue to operate and China decides to blacklist the Philippines, Daway-
Ducanes said the economy stands to lose 0.8 to one percent of GDP.
“If we bump this up against economic benefits, we are looking at a net negative impact of
POGOs in the country,” Daway-Ducanes said.
“While there is uncertainty about blacklisting and the extent of its impact to tourism,
offshore gaming generally remains illegal in most Southeast Asian countries,” she said.
Maria Karla Espinosa, DOF director at the Fiscal Policy and Monitoring Group, also
expressed support to the prohibition of POGOs due to the social costs and reputational
risks that they entail.
Espinosa argued that social ills associated with POGOs are opening up to high
reputational risks which can severely affect the country’s efforts in attracting foreign direct
investments.
The DOF official likewise noted that the pullout of POGOs would not derail the real estate
industry considering that the condominium market, which also serves the POGOs,
remains resilient and is in recovery mode.
“We cannot afford to lose the needed productive investment and their accompanying
revenue from more legitimate industries which can be gained from positive business
perception at a time when the country is gearing toward full economic recovery,” Espinosa
said. The Philippine Amusement and Gaming Corp. (PAGCOR), on the other hand,
disagreed to ban POGOs in the country, saying this is not the appropriate response to the
challenges of the sector.
Instead, PAGCOR offshore gaming licensing department senior manager Renfred Tan
said the agency is advocating for proper regulation through intensive monitoring and
better interagency coordination and data sharing.
Tan emphasized that PAGCOR has initiated some regulatory reforms to enhance POGO
regulation such as increasing the capitalization requirements for license applicants.
Philippine Offshore Gaming Operators (POGOs) is the official designation for firms operating in the Philippines
which offer online gambling services to markets outside the Philippines.
Philippine Offshore Gaming Operators or POGOs are online gambling firms that operate
in the Philippines but cater to customers outside the country. To operate legally, they must
be licensed by the Philippine Amusement and Gaming Corporation (PAGCOR).
There are three license categories. Category 1 involves services that have live streaming
with women online gambling dealers. Category 2 and 3 are sub-sectors of business
process outsourcing (BPO) which provide back office support.[3]
There are 138,000 foreigners employed by POGOs as of May 2019, with 83,760 of them
holders of special work permits allowing them to stay in the country for at most six months.
Only 17 percent of those employed in POGOs are Filipino nationals.[6] Employment
decreased significantly during the COVID-19 pandemic.[7]
makes
