President Marcos has said his administration is considering whether or not into allow Philippine offshore gaming operators (POGOs) amid reports of the sector’s involvement in criminal activities in the country.
In a briefing with Palace reporters shortly before boarding his plane to go back to the Philippines, the President said it may not be worth allowing POGOs to stay in Philippines if their operations come at a social cost.
“It’s not a huge part of our economy. And if it’s adjudged that there is a social cost, it might not be worth it. The cost might not be worth what they’re paying in taxes anymore,” the Chief Executive said.
Marcos clarified however that those involved in crimes were usually from illegal POGO operations, which authorities have addressed.
“The problem are the illegal ones, not the legal ones. The legal ones pay their bills, pay their taxes and you know those—‘yung mga video na nakikita natin nagpapatayan na—‘yun mga illegal ‘yun. Kaya ang dami na natin pinaalis na illegal. Nagsara kami ng mga illegal POGO at dineport (deport) lahat nung mga kanilang tao.”
Beijing earlier ordered a crackdown on gambling which is disallowed in China.
“If China wants us to do that, we’ll see what the arrangement could be ‘di ba?” the President said.
Some POGOs have been accused of evading taxes and driving up property rates while not providing job opportunities.
About 34 POGOs are licensed to operate and around 130 support services are registered, according to the Philippine gaming regulator.
Finance Secretary Benjamin Diokno has said he wanted online gaming operators banned. He said revenues from POGOs peaked in 2020 at P7.2 billion, but fell sharply in 2021 to P3.9 billion.
Senator Sherwin Gatchalian early on said even licensed POGOs are not paying correct taxes.
“It’s regrettable that even legitimate POGOs are remiss in the payment of correct taxes. This is exactly the reason a tax regime for POGOs was put in place which is to reduce uncollected taxes due the government. It is lamentable that even licensed POGOs continue to disregard accurate payment of taxes,” Gatchalian said.
According to him, the POGOs have under-declared tax payments to the government as shown by discrepancies between gross gaming revenues the operators submitted to the Bureau of Internal Revenue (BIR) and Philippine Amusement and Gaming Corporation (PAGCOR.).
The senator cited a research that showed estimated tax leakages of P1.9 billion due to the discrepancy of gross gaming revenue as reported by the BIR and PAGCOR from POGOs from January to August this year.
He said indicative gross gaming revenue from that period, based on 5% gaming tax payments made to the BIR by operators, totaled P28.36 billion.
However, the 2 percent regulatory fee payments to PAGCOR show indicative gross gaming revenue for the same period at P66.67 billion.
“Research shows that we are not realizing the full benefits of allowing POGO operations in the country. It’s high time we consider developing other industries that are sustainable, high-yielding, and long-term businesses,” Gatchalian said.