The “invasion” of the Philippines by almost half a million Chinese working for offshore gambling operators—and the money laundering, human trafficking, and prostitution that came with it—was the result of policies that were too soft on China, Senator Richard Gordon said Wednesday.
READ: Abused POGO worker says PH government exec behind crimes
“This would never happen if the administration were not too soft on China,” said Gordon, chairman of the Senate Blue Ribbon committee, which is investigating Philippine Offshore Gaming Operators and their involvement in illegal activities.
Gordon stopped short of saying the government condoned the abuses being tied to the POGOs but said there was an apparent hesitance, particularly on the part of the Anti-Money Laundering Council, to call out their money laundering activities.
“I think there’s a patina of doubt because the President is close to China, there might be secret negotiations on this matter… maybe there is a deal that we do not know about,” Gordon said in a mix of English and Filipino.
“Tolerance is tolerance. Take it for what the word means. You don’t order an arrest so there’s tolerance. Customs reported to you and AMLC did not act,” Gordon said.
He also said there is a failure in the existing foreign policies. “Yes, and it’s not the fault of the Foreign secretary,” he said.
Gordon said the suspiciously large amount of foreign currency, $470 million brought in by 47 individuals from September 2019 to February 2020 alone, all without being flagged—was a sign that the authorities were tolerating money laundering.
POGOs are required to report suspicious transactions to the AMLC to prevent the growing online casino industry, catering mainly to Chinese players, from becoming a conduit for money laundering.
“It appears that the relevant authorities chose to turn a blind eye to the nefarious activities that come with the prevalence of POGO in our country in exchange for a few billions in tax revenue, or perhaps because of pastillas or any other form it may take,” he said, referring to a bribery syndicate that eased the entry of Chinese nationals for a fee.
“We have a report that one individual was able to bring in huge amounts 45 times. That is what I call done with impunity,” the senator said.
Gordon warned that money laundering is a threat to national security because it can be used to fund organized crimes, destabilize governments and erode the integrity of the nation’s financial institutions.
“This is very alarming. We don’t know were the money comes from and where it will go, and we’re not monitoring who these people are,” he said.
He said the funds could allow syndicates to thrive and perpetuate criminality. In extreme cases, it can be used to fund armies or finance a coup’d’etat.
“It is also a threat to our economy because it can cause artificial inflation. Often… dirty money is used to purchase real properties which will cause the value or price of these properties to increase by creating the illusion of a demand when there is none,” he said.
READ: POGO workers laundered P10 billion in 'dirty money,' Gordon says
“It causes a decrease in productive employment by causing businesses to fail, hence workers lose their jobs,” Gordon added.
But Justice Undersecretary Adrian Sugay said that AMLC has been looking into the money laundering activities allegedly perpetrated by Chinese nationals, even though it has not yet filed any complaint.
“We’ve… coordinated with the AMLC to make sure that the matter is looked into and if there are appropriate complaints… that need to be pursued, we have told them that we are ready to help them pursue these cases,” Sugay said.
The DOJ official said, however, that his department cannot conduct investigations on its own into alleged money laundering without a complaint.
Surigao del Norte Rep. Robert Ace Barbers on Wednesday slammed the concerned government agencies’ inaction over the funneling of at least $370 million of suspected dirty money by some Chinese nationals into the country.
Barbers, chairman of the House committee on dangerous drugs, said the Anti-Money Laundering Council, the Bureau of Customs, the Department of Finance, the National Bureau of Investigation, the Philippine National Police, the Armed Forces of the Philippines, among other concerned agencies, appear tightlipped and helpless on how to resolve this issue.
“Worse, officials of these agencies knew the persons or personalities involved—the “Chinese Group” and the “Rodriguez Group”—and operatives of these syndicates are being escorted by police and military personnel in their very suspicious activities here,” he said.
Barbers said the sneaking in of huge amounts of suspected dirty money was being carried out “in your face” by unscrupulous Chinese nationals in the country’s airports without the authorities conducting deep background checks on these individuals.
At the same time, Armed Forces spokesman Brig. Gen. Edgard Arevalo denied allegations that soldiers were providing security to money launderers.
At the Kapihan sa Manila Bay press forum, Arevalo said the involved personnel could be retired military servicemen working in private security agencies.
Opposition Senator Risa Hontiveros said the President should speak against the ills brought about by the influx of POGOs.
The Palace said the President could suspend the operations of Chinese offshore gaming hubs operating in the country if there are enough complaints that merit such action.
Presidential Spokesman Salvador Panelo said those gaming hubs might suffer the same fate of lotto operations, which were also shut down by the President due to alleged irregularities.
“The President, remember, has suspended the operations of lotteries when he received certain complaints of anomalies. That’s very much the same. If there is gravity in the complaints, the President will do something about it,” Panelo told Palace reporters.
The Palace official also said that Chinese gaming hubs are not enjoying “blanket protection” from the administration.
“Nobody is enjoying blanket protection. There are no sacred cows regardless of who they are, even if they are Filipinos,” Panelo said.
He also said the Chief Executive will evaluate the proposed measures to prohibit gaming hubs from operating in the Philippines.
On Tuesday night, President Rodrigo Duterte said in a speech that he has been finalizing a list of Bureau of Immigration officials he will dismiss for their alleged involvement in the “pastillas” bribery scheme which involves Chinese nationals working for POGOs.
The list would be released by the President “sooner than we think” and those on it will face anti-graft charges, Panelo said.
The President also expressed frustration that some of the officials on his list were his fraternity brothers from the San Beda University-based Lex Talionis Fraternitas.
“I don’t like it because some of them I know personally. But some of them are my brods. Others were with me in ‘88 when I first ran for the mayorship, that was ‘88, ’98,” he said.
President Duterte earlier ordered the relief of around 19 BI personnel who were allegedly involved in the bribery scheme.
READ: Immigration man tags 5 in ’pastillas’
Amid the controversy, Panelo said President Duterte has given Commissioner Jaime Morente the space to improve the situation in his bureau.
READ: After ’pastillas,’ Morente probed
Meanwhile, a recent survey by PricewaterhouseCoopers revealed that bribery and corruption in the Philippines have spiked in the last two years, with a fifth of businesses saying they were made to pay grease money.
The poll showed that 42 percent of companies reported experiencing fraud in the past two years, losing anywhere between $5 million and $50 million.
Meanwhile, 21 percent of firms operating in the country said they have been asked to pay a bribe. It added that 14 percent of respondents claimed they “lost a business opportunity” because their competitor paid grease money to get ahead.
“This is concerning as businesses operating in the Philippines may be more likely to contemplate paying bribes as a feasible option to take in order to win business opportunities against competitors,” the report said.
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