In what appears to be an odd choice of priorities, the task force created to deal with the COVID-19 pandemic has allowed online gambling companies to resume operations.
The government has justified the move to allow Philippine Offshore Gambling Operators (POGOs) to operate even under strict quarantine conditions using three arguments.
First, they say, the government needs the money. The Philippine Amusement and Gaming Corp. (Pagcor), which oversees POGOs, says all the money the government earns from their operations can be plowed back into the anti-COVID-19 effort.
Second, they say, workers need the money and POGOs generate employment.
Third, they argue, POGOs are part of the Business Process Outsourcing (BPO) industry, where companies are allowed to operate under quarantine rules as long as they use a skeleton workforce of only 30 percent of their total number of employees.
“This is essential because we need revenues. POGOs generate revenues and employment, minus the threat of spreading the virus,” said Pagcor chairperson Andrea Domingo.
But how much in revenues will POGOs operating at 30 percent capacity really generate? The Bureau of Internal Revenue (BIR) had earlier revealed that POGOs account for more than P27 billion worth of uncollected tax liabilities. And in March, Pagcor admitted there were more than 100 unlicensed POGO outlets under investigation.
The Anti-Money Laundering Council estimates that POGOs generate only â‚±7 billion in net inflows, while the Senate Blue Ribbon Committee has opened inquiries into POGO-related crimes, including sex trafficking and money laundering.
The government says it will be more strict when it comes to taxes, but we have to ask: how much more efficient will a bureaucracy hobbled by lockdown conditions be in collecting taxes, when it was unable to do so when it was operating at full force?
The track record simply offers us no reason for optimism.
Second, a vast majority of POGO workers are Chinese nationals—some of them here illegally—simply because these companies cater to online gamblers in China, where the activity is illegal. By one account, Filipinos accounted for only 17 percent of the POGO workforce in 2019 – or only 23,000 of 138,000 workers. In contrast, the BPO industry employs 1.2 million, almost all of whom are Filipinos.
Which brings us to the mental gymnastics that some officials have had to do to make us believe that POGOs are part of the BPO industry, which by most commonly accepted definitions include the provision of third-party services such as payroll, human resources, accounting and customer relations. None of these definitions include online gambling.
In fact, the umbrella industry group of BPOs asserts that POGOs cannot be considered as BPO.
First, the IT and Business Process Association of the Philippines, or IBPAP says, BPOs are registered with either the Philippine Economic Zone Authority or the Board of Investments, while POGOs get their license to operate from Pagcor.
Second, while both types of businesses provide offshore services, the POGOs “primarily do so because they are unable to practice their betting or gambling functions” because the activities are illegal in their home country.
IBPAP also points out that BPOs invest in Filipino workers while POGOs mostly employ foreign nationals, and BPOs create higher value jobs.
Whether POGOs are ultimately good for the country and should be allowed to operate is a serious policy decision that the country’s leaders will have to decide in the future. It is not the kind of decision that an ad hoc committee set up to deal with a public health crisis should be making. But, having done that, shouldn’t the task force on COVID-19 really give priority to industries that actually hire more Filipinos?