Philippines move for firms catering to Chinese gamblers to reopen amid lockdown faces backlash

Pogos are largely located in the Metro Manila region, where the strict quarantine is not due to be lifted until May 16.
PHOTO: South China Morning Post

The Philippines' decision to allow gaming firms to resume their operations ahead of other local businesses has been met with fierce criticism, but officials insist the move is necessary as the government needs the revenue to fund its response to the Covid-19 pandemic.

Philippine offshore gaming operators (Pogos) - which cater to gamblers in China, where the activity is illegal - were ordered to close in March as part of lockdowns to curb the spread of Covid-19.

They employ tens of thousands of Chinese nationals, many of them illegal workers, and are largely located in the Metro Manila region where the strict quarantine is not due to be lifted until May 16.

The gaming centres have been linked to a spike in crime, including prostitution, human trafficking, and corruption.

Government officials on May 1 said some Pogos would be allowed to reopen with 30 per cent of their usual employees, subject to requirements such paying as taxes and fees to the state - a particular bone of contention among those looking to regulate the industry - and testing all workers for Covid-19.

"It's dismaying that [the authorities] are giving priority to Pogo workers rather than their own fellow Filipinos," said Senator Risa Hontiveros, who has presided over a series of hearings on the gaming firms.

In an April 26 editorial, the Philippine Daily Inquirer warned of the "feelings likely to be stirred by news that even as Filipinos are being asked to sacrifice and endure temporary hardship in the name of a national health emergency, foreigners - specifically Chinese workers - may soon be welcomed back to our territory so they can resume their employment" in Pogos.

But Andrea Domingo - who heads the Philippine Amusement and Gaming Corporation (Pagcor), which regulates Pogos and is under the Office of the President of the Philippines, on May 1 said Filipinos were being "racist" towards Chinese workers.

"They are people too, they get hurt if we badmouth and talk trash about them," she told CNN on May 1, adding that the Philippines was "losing some business" as some Pogos had already relocated due to the hostile environment.

Domingo also said revenue from Pogos could be a significant source of funds for the government's Covid-19 response, and that all taxes on the gaming firms would be used to this end.

Veteran journalist Vergel Santos said if Pogos resumed operating, "the mainland Chinese workers will be privileged" because unlike most of the people in Manila "they will be out there in the streets, they will be working in their crowded places and coming back" to their homes.

Senator Sherwin Gatchalian on May 4 said Pogos owed the Philippine government 50 billion pesos (S$1.4 billion) in taxes.

"If an industry doesn't pay proper taxes… how can you trust them to operate in the new normal?" he said. "If they can trick the government like this, then how can you trust them to observe social distancing when their priority is to earn?"

In confirming that Pogos were allowed to resume partial operations, presidential spokesman Harry Roque on May 1 said the gaming firms were part of the business process outsourcing (BPO) sector, which was valued at close to US$26 billion last year.

BPO firms have been allowed to operate during the lockdown.

However, the Information Technology and Business Process Association of the Philippines (IBPAP), a BPO industry group, rejected the government's classification and said Pogos "cannot be considered" BPO firms.

Senate minority leader Franklin Drilon pointed out that if Pogos were really part of the BPO industry then they would be exempted from paying franchise fees.

Philippine President Rodrigo Duterte says the country needs the revenue generated by Pogos.
PHOTO: South China Morning Post

On Monday, several newspapers ran a full-page advertisement paid for by Pagcor that extolled the billions of pesos Pogos contributed to the economy as well as the jobs they created for Filipinos - along with an assertion that the gaming firms are not involved in criminal activity.

However, numerous investigations - including hearings conducted by senator Hontiveros - have seen police officials linking Pogos to prostitution and human trafficking.

The latest scandal involved a syndicate in the Philippine immigration bureau that provided instant entry for Chinese nationals with criminal records, as well as those looking to work illegally in the gaming firms.

Read Also
Illegal gambling sites tout bets on number of Covid-19 cases in Singapore
Illegal gambling sites tout bets on number of Covid-19 cases in Singapore

Congressional hearings have established that not only have Pogos avoided paying billions in taxes, but the gambling centres have also proliferated, many operating without licences and permits.

In December 2019, Pagcor told Congress there were 72 licensed Pogos, of which 49 were operational, while the Bureau of Internal Revenue said only 10 of the 49 were paying franchise taxes.

Beijing has several times asked Manila to crack down on the gambling centres, but President Rodrigo Duterte has refused to act, saying the Philippines needs the revenue they generate.

But senator Gatchalian said: "For me, if you compare what you earn from Pogos to the risk of spreading the virus, we will lose a lot more if the virus spreads in the Pogos. We might lose a lot more if we allow them to operate."

For the latest updates on the coronavirus, visit here.

This article was first published in South China Morning Post.