Pangilinan, Hontiveros call for Senate probe into PAGCOR lobby for POGOs’ quarantine exception

May 7, 2020

SENATORS Risa Hontiveros and Francis “Kiko” Pangilinan on Thursday called for a Senate inquiry in aid of legislation into the Philippine Amusement and Gaming Corporation (PAGCOR) lobby to exclude Philippine Offshore Gaming Operators (POGOs) in the COVID-19 quarantine. 

Senate Resolution 396 comes after the gaming regulator last week allowed POGOs to resume partial operations, subject to strict conditions, purportedly to boost government revenues during the COVID-19 pandemic.

But, Hontiveros and Pangilinan said, “PAGCOR’s actuations in lobbying for an exception in favor of the POGO industry threaten to unduly put the health and well-being of the Filipino people at risk by undermining the ECQ (Enhanced Security Quarantine).”

“Even going by the official estimate, allowing more than 50,000 workers in the online gambling industry to return to work represents a substantial exception to the ECQ rules,” they said.

“Allowing the partial resumption of POGO operations could reverse the efforts put in place to stem the spread of COVID-19 as there is no assurance that POGOs will follow the Department of Health’s guidelines on physical distancing, wearing of masks, and frequent handwashing and sanitation,” they added. 

Earlier this week, PAGCOR took out ads for the publication of a primer on POGOs. The primer, which was also posted in the PAGCOR website, refutes allegations, including a report by the Anti-Money Laundering Council (AMLC) linking POGOs to crimes including drug trafficking and money laundering. 

In pushing for the exemption of POGOs to the ECQ, PAGCOR chairman Andrea Domingo argued that POGOs are part of the Business Process Outsourcing (BPO) sector, which has been allowed to operate during the ECQ. 

But the IT and Business Process Association of the Philippines (IBPAP) rejected that POGOs are part of the BPO industry, citing four key differences: 

(1) BPO companies are registered with the Philippine Economic Zone Authority (PEZA) or the Board of Investments, while POGOs are registered with PAGCOR, 

(2) the offshoring nature of POGOs are allegedly because they are unable to practice their betting or gambling functions in their respective shores, 

(3) IT-enabled jobs BPO companies create are of much higher value, requiring a range of technical, domain, and soft skills, and 

(4) BPOs come to the Philippines to leverage off the country’s human capital, like strong English and technical skills, customer service orientation, malasakit, and ability to adapt to foreign cultures. On the other hand, majority of POGO staffing comes from foreign labor brought into the country to support their operations.

According to IBPAP, POGOs are not part of the annual IT-BPO Headcount and Revenue report, which in 2019 ended with 1.3 million direct employees and $26.3 billion in revenues.

PAGCOR also contends that revenues from POGO operations can be a significant source of funds for the government’s COVID-19 response. It also says operators are ordered to pay all tax obligations up to March 2020 before they will be allowed to resume operations and only registered workers cleared in COVID-19 rapid tests will be allowed to report back to work.

But on February 2020, the Bureau of Internal Revenue revealed that POGOs failed to pay the government an estimated P50 billion in withholding and franchise taxes in 2019.

Pangilinan and Hontiveros said the uncollected taxes of POGOs could be a source of additional government funds for COVID-19 response. 

“[But these] taxes need to be collected regardless of the industry’s status of operations during the community quarantine,” they said. 

Earlier this week, House Minority Leader Bienvenido Abante Jr. led a group of congressmen in filing an Anti-POGO Act seeking to have POGOs declared illegal by prohibiting the operations of any offshore gaming by any means or device within Philippine territory.

Pangilinan and Hontiveros pointed out that the resumption of POGO operations will have minimal impact on the country’s economy, citing AMLC records showing that the industry only accounts for 0.04% of the domestic economy.