Philippine Offshore Gaming Operators

Philippine offshore gaming operators are companies that provide online gambling
services to foreigners. Think Poker, Blackjack, and Roulette, only they're all facilitated via an
online medium, with a virtual dealer often being played by a woman dressed in skimpy clothes
on the screen. The woman and the large team of tech support behind the screen make up the
POGO.

Philippine offshore gaming operators must be registered and licensed by the Philippine
Amusement and Gaming Corporation (PAGCOR). Any POGOs that are operating without a
PAGCOR-issued license are considered illegal, and their workers, as well. As of June 9, 2019,
there are 56 licensed POGOs in the country that employ an estimated 100,000 to 250,000
Chinese nationals. Yet the number of illegal POGOs is estimated to be at around 30.

The government earns a lot from application fees paid by POGOs, service providers, and
even the local gaming agents. They also earn from license fees and bond fees for POGOs.
POGOs also made up the biggest part or 38% of Metro Manila’s office space demand as of third
quarter in 2019, overtaking for the first time the IT-BPM (Information Technology and Business
Process Management) industry’s demand at just 30 percent. In 2018, IT-BPM office space
demand comprised 36% of transactions, while POGOs followed at 24 percent

With the slowing down of BPO investments and even overseas Filipino workers (OFW)
purchases of condominium units, POGOs are boosting the slowing services sector as well as the
real estate sector. Because of this contribution to economic growth, the government does not
seem intent on stopping their operations. This is despite the controversies surrounding POGOs
such as money laundering, kidnapping incidents and employing mostly Chinese citizens, and of
course, gambling being a parasitic economic activity.

The Chinese government has already asked the Philippines to stop the licensing of all
POGO operations due to possible illegal activities. PAGCOR, however, has only suspended the
issuance of new licenses while continuing existing licenses and renewals. This call from the
Chinese government is a hypocrisy. China has banned gambling in its shores, but operators only
moved out of China and went to countries offering better incentives. China still benefits from
POGO operations due to employment opportunities for its thousands of citizens who have low
educational attainment and cannot find work.  Chinese citizens finding employment in the
Philippines is better for the Xi Jin Ping government since people’s dissatisfaction could
destabilize its rule.

Meanwhile, a POGO Tax Bill has already been approved by the House Means and Ways
committee and awaits deliberation. The bill will only slightly increase the annual gross corporate
income tax of POGOs from a miniscule 2 to 5 percent. It will also enforce that POGO employees
pay 25% in personal income taxes. If passed, the POGO Tax Bill is claimed to increase the
country’s gross domestic product by 1.2-1.5 percent.

POGOs may have temporarily made up for slowing BPO investments but once POGOs
slow down, what comes next? It is turning out to be another service-oriented – and even foreign-
catering – industry that brings temporary and minimal benefits to the country. That is unless the
government prioritizes and develops Filipino consumer, intermediate and capital good industries.
The government can protect our local industries rather than open up the country to foreign
companies.

Upholding an independent foreign policy is also important if we want to attain genuine

economic development. The Philippines can adapt to changes in the global economy by shifting
to domestic demand-driven growth. But unless government overhauls its programs and policies
to prioritize domestic industries and agriculture and the people’s welfare, the same failed
neoliberal policies will be perpetuated. The Philippine economy and Filipinos will remain
vulnerable and dependent on big business interests and the vagaries of the global market.