POGOs once again targeted in the Philippines

POGOs in the Philippines have had a fraught couple of years. The government of former President Rodrigo Duterte passed laws that effectively reduced the number of active operators and increased the rate of taxation. Then, there is China to mind as well. A patchy track record about poor working conditions in POGOs has made the country fixate its gaze on the Philippines and the offshore gaming sector.

This has, in turn, caused some tension between the countries. President Duterte, a strong-willed man, seldom listened to what one of the Philippines’ most important trade partners wanted when it came to domestic affairs, but some have been paying attention.

Now, a number of business organizations to name the Foundation for Economic Freedom, the Makati Business Club, and the Management Association of the Philippines, made a public address in which they said that POGOs need to be shuttered once and for all.

They assured that any economic shock to follow would be quickly absorbed and that the long-term benefits were actually much better and far outweighed short-term consequences of such a move. These claims, though, look a little woolly as they lack any verifiable data. Yes, there are fewer POGOs today than there were in 2019 – around 34 remain from the 63 at peak time.

But shutting them down is not a great idea. There are several reasons for that. For starters, an economist lawmaker by the name of Joey Salceda, who spoke to the CNN Philippines, said that as many as 90,000 workers may actually end up without a job.

This is a tremendous number by any measure. POGOs employ people across a number of professions, including housekeeping staff, cooks, waiters, drivers, encoders, dealers to service the gaming tables, and so many others. There has indeed been crime linked to the sector. The groups though insist that POGOs have a deplorable track record of treating their employees and many are actually deprived of pay or underpaid chronically.

This has been indeed happening, especially with overseas workers from China, which is precisely why China started getting involved in the first place. Dismantling the industry in one fell swoop though does appear counter intuitive to put it mildly. Rather, POGOs should be better regulated if they are showing any signs of operating outside the law.

The other reason for not shutting down POGOs is that they are generating a hefty bit of tax revenue that will not be made up for by any other business. POGOs and PAGCOR were crucial in the pandemic months when they provided ample funding from tax revenue to the state, and specifically the country’s cash-strapped health care system.

Meanwhile PAGCOR, the state-owned regulator and operator, said that POGOs are regulated and that any entity that does not own a license cannot be classified as POGO and should not be aggregated with the legitimate operators when talking about the sector.

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