The Chinese embassy denied placing the Philippines on a tourism blacklist due to the presence of POGOs (Philippine Offshore Gaming Operations).
“The report of ‘tourist blacklist’ is misinformation. China has not placed the Philippines on its blacklist for tourism,” the embassy said in a statement issued late Tuesday evening.
Earlier, Senate President Juan Miguel Zubiri, quoting Chinese Ambassador Huang Xilian, said Tuesday China has warned its nationals to stay away from countries that host online gambling for Chinese nationals due to safety and security concerns.
Because of the problem of Philippine Offshore Gaming Operations (POGOs), the Philippines now is blacklisted and tourists now are discouraged to go to the Philippines,” Zubiri said.
China has warned its nationals to stay away from countries that host online gambling for Chinese nationals due to safety and security concerns, Senate President Juan Miguel Zubiri said Tuesday, quoting Chinese Ambassador Huang Xilian.
“Because of the problem of Philippine Offshore Gaming Operations (POGOs), the Philippines now is blacklisted and tourists now are discouraged to go to the Philippines,” Zubiri said.
“Ambassador Huang said the Philippines now is part of a blacklist of tourist sites because they do not know if the tourist will be joining POGO operations and they do not know if the Chinese nationals who go to the Philippines will be safe from illegal activities being done by the triad, by the syndicates operating POGO. They may also be kidnapped, mistaken as POGO operators,” he added.
Senator Sherwin Gatchalian, however, said he has a “different appreciation” of what the ambassador said.
“Maybe our appreciation of the comment is different, but definitely our understanding is POGOs will affect tourism coming from China. Whether it’s a restriction, a total blacklist, that’s where we differ in our appreciation but we agree that POGOs will affect the number of tourists coming from China,” Gatchalian said.
The ambassador, who paid a courtesy call to the Senate, said that based on their assessment, the owners and operators of POGOs are likely to be connected to crime syndicates and illegal activities, and thus are wanted in China.
“The Chinese government is against any forms of gambling including POGO or online gambling,” Zubiri said.
A statement issued by the Chinese embassy in Manila after Huang’s meeting with Zubiri, Gatchalian and Sen. Robinhood Padilla said according to Chinese law, Chinese citizens opening casinos to attract Chinese citizens as primary customers constitute gambling crimes.
“Criminal liability can be pursued in accordance with the provisions of the Criminal Law of China. The Chinese government and law enforcement have been taking tough measures to combat all forms of gambling,” the embassy said.
“Most of the recent crimes targeted at Chinese citizens in the Philippines are related to POGO. [The] Chinese government cares about and protects the safety and legitimate interests of each and every overseas Chinese citizen,” it added.
The embassy said it appreciated that Philippine law enforcement agencies have rescued a number of Chinese citizens and shut down some POGO companies during their operations.
“Crimes induced by and associated with POGO not only harm China’s interests and China-Philippines relations, but also hurt the interests of the Philippines. It is therefore widely believed that social costs of POGO far outweigh its economic benefits to the Philippines in the long run,” the embassy said.
The embassy did not deny the “blacklist” remarks but said it expects more Chinese tourists to come to the Philippines post-pandemic.
“To further elucidate on the ‘tourist blacklist’ remarks, tourism is an important component of practical cooperation between China and the Philippines which has helped further deepen long-time friendship between the two peoples.
Before the COVID-19 pandemic, close to two million Chinese nationals traveled to the Philippines in 2019, making Chinathe second largest source of tourists.”
The Palace said it has yet to receive an advisory about the Philippines’ inclusion in any Chinese blacklist.
Undersecretary Cheloy Velicaria-Garafil, officer-in-charge at the Office of the Press Secretary, declined to comment on whether the Palace is concerned that the country’s inclusion in such a list would hurt tourist arrivals, saying it was best not to speculate.
Chinese nationals accounted for 1.25 million tourist arrivals in 2019 or about 15 percent of the total 8.3 million visitors, data from the Department of Tourism showed.
Finance Secretary Benjamin Diokno has said he supports ending POGO activities because of the “social cost” associated with the industry.
“Studies on the POGO industry have shown that POGO operations involve illegal activities such as prostitution, employment of minors, and violation of labor laws,” Diokno said in his position paper submitted to the Senate committee on public order and dangerous drugs and ways and means.
He also noted that POGO has “reputational risk,” especially since other countries like China and Cambodia have already banned online gambling.
Citing government data, he said POGO revenues plunged to P3.9 billion in 2021 from P7.2 billion in 2020.
Diokno said it is time for the country to pursue investments that will create value and high-quality jobs for Filipinos.
In her presentation before the Senate ways and means committee hearing, Undersecretary Rosemarie Edillon of the National Economic and Development Authority (NEDA) said the agency identified at least two possible economic costs of POGOs.
The first one was China’s “threat” of prohibiting its nationals from visiting the Philippines as tourists.
“One is the statement of China when they said that they will intensify the crackdown on cross-border gambling on claims that it serves as a venue for fraudulent transactions and illegal recruitment of Chinese workers so they adopted what they called a blacklist of cross-border gambling tourism destinations,” Edillon said.
“So what they threatened to stop was actually, first, the tourism, the Chinese tourists coming into the Philippines and they have singled out Cambodia and the Philippines for that matter. Cambodia actually quickly banned the industry but the Philippines did not heed China’s call,” she added.
Edillon said another potential cost of POGOs was the inclusion of the Philippines in the so-called greylist of the Financial Action Task Force.
“The Financial Action Task Force has placed the Philippines in the greylist and they have also singled out POGOs, saying that there’s low awareness and regulation of anti-money laundering and counter-terrorism financing and there’s the growing threat of money laundering and other fraudulent activities, [given] the number of unregulated or unsupervised service providers and the low level of beneficial ownership identification,” Edillon said.
“What this means essentially is for foreigners wanting to transact business in the Philippines, they will have to exert special due diligence. So just as we are trying to attract more foreign investments, it actually adds to the cost of doing business with the Philippines. There will be additional clearing times because of the fact that we are in the greylist,” she said.
These assessments were based on the AMLC’s statement in March 2020 which showed that P14 billion of P54 billion POGO transactions between 2017 and 2019 “were dubbed as suspicious transactions.”
Edillon said the government wants the Philippines off the FATF greylist by January 2023.
On the other hand, an association of 16 licensed POGOs and 68 service providers told the Senate that some P62 billion has flowed into the nation’s coffers over the last six years because of POGOs.
A representative of the Association of Service Providers and POGOs (ASPAP), Paul Bongco, also said the country gained much from the industry during the COVID-19 pandemic.
During the pandemic, he said ASPAP gave assistance amounting to P230 million in cash, P24 million in relief goods, P300,000 in test kits and P2.5 million in surgical masks and hospital equipment.
The industry also has provided jobs for 23,000 Filipinos, he added.
Another representative, Michael Danganan, added that the number of Filipino workers would overtake the number of foreign workers in POGO “soon.”
With the Philippines and the Filipinos benefiting from POGOs, Bongco and Danganan appealed to the country’s lawmakers and the government to give legal POGOs a chance to continue their operations in the Philippines.
They also urged the senators to weigh carefully the good effects of POGOs in the country.
Finance Undersecretary Bayani Agabin, however, said the country can attract foreign investors in other industries to offset the losses should all POGOs stop operating.
“Yes, there is a cause for concern, but again as I stated earlier, if we can attract industries with high value added, higher technical requirements, higher professional employment rate, we can get tourists as well, then that should be more than enough to cover what we may potentially lose if POGO exits the country,” he said in a Senate hearing.
Data from the Bureau of Internal Revenue (BIR) show that revenues from POGOs reached P4.438 billion from January to August this year, higher than the P3.91 billion collected for the full year 2021.
But both figures fall far short of the P32 billion goal set under the POGO Law signed by President Rodrigo Duterte in September 2021
Also on Tuesday, the chairperson of the House of Representatives committee on labor and employment urged the government to “practice empathy and fairness” in dealing with POGO workers, even as officials are set to deport 480,000 illegal POGO workers.
“We have to achieve balance in our policy, and practice empathy and fairness toward the illegal POGO workers who have come here to find employment,” the panel chairman, Rizal Rep. Fidel Nograles said in a mix of English and Filipino. “Let us remember our fellow countrymen in other countries who we want to be treated fairly.”