Time to (Po) go
There’s yet no decision, so I’m going to weigh in.
I’m one of those odd people that doesn’t put money first. Pursuing a satisfying career of accomplishment in an honest, moral life and living it ethically trumps (I wish I didn’t have to use that word) money first. On that basis, the delightful comic book “Pogo” of my childhood was a delight, a wonderful part of growing up. On that basis, the Philippine offshore gaming operators (Pogos) on the boulevard must go. They have no role to play in Christian life.
As far as I’m concerned that applies not only to Pogo but to all forms of gambling. It damages far, far more people than it ever benefits. Where on earth do the gamblers think the huge sums needed to build the opulent casinos come from—them as they lose and lose, and lose. But freedom to live your life the way you choose, as long as it doesn’t negatively impact others is absolute as far as I’m concerned. So if people want to throw their money away, let them. It’s their money.
This applies to Pogos, too. They should be allowed if they don’t negatively affect others. The thing is, they do. Their negative impact on the rest of society is worse than whatever benefit they provide. There is, in fact, little benefit, but considerable harm.
Those who defend the continued existence of Pogos in the country justify it by the revenues and jobs we stand to lose if they shut down. But the Department of Finance, which well knows the financial condition of the country, has made clear to Congress its stance against the continuation of Pogos. It estimates that the total economic contribution of the industry is P64.6 billion. Much of that is indirect that will continue but serve other activities.
Pogos’ contribution to the government from that is miniscule. It was a mere P7.2 billion in 2020 when things were normal. That’s only 0.25 percent of government revenues. In 2021, this halved to P3.9 billion. The better result in 2020 was due to the government’s more effective campaign against tax-dodging Pogos and their service providers in 2019, as well as some licensees finally paying the 5-percent franchise tax—a prerequisite for them to resume partial operations during the enhanced community quarantine. Helping there was Republic Act No. 11494 or Bayanihan 2 which changed the base of the tax rate to gross bets amid alleged cheating when computing their net winnings previously.
As to potential job losses, Filipinos make up a measly share of Pogo-related employment. The industry employs almost entirely Chinese nationals because of the language needed as most of the gambling emanates from China. Many of these Chinese are here illegally, or worse, victims of human trafficking. It has led to the entry of thousands and thousands of Chinese workers, many of them through reported bribery amongst some immigration officials, which raises a diplomatic problem. Gambling is illegal in China, it’s why the casinos have moved here. What do you think Xi Jinping thinks about a country that allows its citizens to undertake illegal activity in another country?
The Anti-Money Laundering Council discovered a high level of money laundering and other fraudulent activities and a high number of unregulated or unsupervised service providers, and a low level of beneficial ownership identification (the government doesn’t know the real owners of accounts).
Admittedly, the real estate market would suffer as office and residential demand fades away, but then lower rentals would lead to wider demand from other industries such as BPOs, which continue to grow. Some retail consumption may be lost as well, but these economic sectors are resilient. They’ll survive.
As Finance Secretary Benjamin Diokno says, we are at “reputational risk.” Already we have been included in the International Financial Action Task Force list of countries under increased monitoring due to the suspicion that Pogos have been a route for money laundering. We are now on their “gray list.” If that’s raised to the “red list,” it would damage foreign remittances and investment flows immensely.
Their negative impact on society is worse than whatever benefit they provide. Pogos’ final exit wouldn’t affect us much. Whilst tax collections are halved and there’s a return of economic activity in other more promising sectors, now is a good time to shut Pogos down. Time to (Po) go.
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