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Friday, March 29, 2024

Economist highlights POGO positive contributions to PH economy

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With the country posting robust growth numbers in the third quarter of 2022, an economist on Friday acknowledged that legitimate Philippine offshore gaming operations (POGOs) have positive contributions to the economy given the revenues the industry generates and the thousands of Filipinos it employs.

Asked in a radio interview regarding the wisdom of shutting down POGOs, Rizal Commercial Banking Corporation Chief Economist Michael L. Ricafort explained that like the booming Business Process Outsourcing (BPO) industry, POGOs also contribute to the economy, not just in terms of the revenues it generates for government and the jobs it creates, but also due to the amounts spent in the country by foreign nationals working for POGOs.

“Kahit papaano… may revenues po diyan, mga empleyado nila dito, lalo na ang mga Pilipino na hina-hire po nila. Bukod pa ‘yun dun sa mga Chinese nationals na nandirito, kasi syempre pag sumuweldo po ‘yan,” said the economist.

Ricafort pointed out “nakakaambag pa po ‘yun kasi ‘yan po ‘yung when it comes to, ‘pag gumastos po sila, ‘yung mga office space na upa, ‘yung mga commercial space, pati ‘yung sa residential, mapa condo po yan… ‘yung mga bahay na inuupahan po nila.”

At a recent hearing of the House of Representatives committee on labor and employment, the Department of Finance admitted that the country could stand to lose close to P65 billion in taxes and other licenses if the industry is shut down.

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Around 40% of the P64.61 billion in losses will come from housing space rentals income, which they peg at P25.17 billion.

The government is also expected to lose P3.43 billion from the value-added taxes of these housing space rentals.

Aside from these sums, the DOF told legislators that P16.63 billion from office space rentals would also be lost, together with the P2.27 billion in VAT charged to these office space rentals.

Other amounts to be lost are P6.56 billion from personal consumption of POGO employees, P3.5 billion from revenues remitted to the Philippine Amusement and Gaming Corporation, and P3.09 billion from transportation.

The government will also forego income from the personal income taxes of POGO employees amounting to P2.74 billion, as well as P830 million in other taxes, P340 million in corporate income taxes, and P50 million from insurance.

Ricafort had previously stated that a “delicate balancing act indeed from a policy and business standpoint” is needed with regard to POGOs. 

“This is a delicate issue especially on legitimate POGO operations in the country in view of local (employment) involved, business given to suppliers of POGOs, and their contribution to the economy in terms of rental income on office, residential, and commercial real estate, their spending that add to sales to various businesses and industries.”

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