Banning POGOs

“Follow the money” is a snappy catchphrase as any in finally giving the boot to the controversial Philippine Offshore Gaming Operators (POGOs).

Generally, “follow the money” means to analyze the money flow to uncover corruption or other criminal activities.

And true enough, following the money trail matters a lot in investigating incidents of criminal activity or corruption in government offices in the wake of POGOs being increasingly linked to organized crime.

In a recent incident, for instance, following the money is the likely first step an alarmed Supreme Court will take in investigating serious allegations that POGO’s corruptive tentacles have suspiciously snared local courts in Central Luzon.

The High Court’s move came after a senator’s explosive claim that during a recent crackdown on a gaming hub in Porac, Pampanga, dumbfounded authorities learned the operators were allegedly “tipped off” prior to the raid that search warrants had been issued.

Following the money, in the general sense, also contextualizes why Finance Secretary Ralph Recto last week said he personally had “no objection” to the loud clamor of Congress for the Marcos government to permanently ban POGOs.

“Today, a lot of POGOs are not really POGOs. They are doing something else… so that must be studied carefully. (But) I have to consult also with the PAGCOR (Philippine Amusement and Gaming Corp.) as to how much they are earning there,” Recto said.

Recto’s stand, however, on the billion-peso offshore gaming industry is hardly surprising.

Even before Recto came along, the Finance department had come out swinging against POGOs, with economic managers expressing willingness to forgo POGO revenues in the face of the offshore gaming industry’s meager contribution to the country’s overall economy.

Such cold-water dousing by economic managers on POGOs was readily seen when former NEDA (National Economic and Development Authority) Assistant Secretary Sarah Lynne Daway-Ducanes testified before Congress that POGOs likely contributed only about 0.2 percent of the country’s GDP (gross domestic product) in 2023, or only about P42 billion.

Last year’s GDP contribution was also lower than the 0.3 percent of GDP in 2022 and the 0.7 percent in 2019, the year POGOs burst on the scene.

Meanwhile, PAGCOR’s and the Bureau of Internal Revenue’s (BIR) POGO collections, says economist JC Punongbayan quoting former Finance Undersecretary Cielo Magno, peaked at P14.4 billion in 2019 but have since dwindled.

PAGCOR Chair Alejandro Tengco says the Marcos government only earned P5.2 billion in licensing and tax revenues from 48 POGO companies operating last year.

Given all these feeble economic figures, it’s no wonder then why economic managers count far more important the suspected criminal ills POGOs bring in their wake like human trafficking, money laundering, online scams, torture and illegal surveillance activities than what they bring to government coffers.

PAGCOR, however, strenuously objects to a POGO ban, insisting that shutting down the mostly Chinese-owned offshore gaming firms isn’t the correct response.

PAGCOR instead insists on more stringent regulations and intensive monitoring by the relevant authorities to prevent criminal syndicates from using POGOs as fronts — this as PAGCOR express worry about the fate of the Filipinos employed by POGOs. PAGCOR found in 2022 that 19,671 Filipinos were directly employed by POGOs.

The only problem, however, with Pagcor’s stance is that despite repeated attempts at further tightening POGO operations these attempts had often failed.

Taming the untamable, in fact, is what essentially compounds POGOs being used as fronts for criminal activities.

Back in 2020 at the height of the POGO wave, for instance, the Anti-Money Laundering Council (AMLC) revealed to the Senate that of the recorded P54 billion worth of POGO transactions then, easily P14 billion could be classified as “suspicious activities.” But former president Rodrigo Duterte denied the AMLC report and even publicly pronounced POGOs “clean.”

And more recently, in the notorious Bamban, Tarlac gaming hub incident, the AMLC could not trace where some P6.1 billion worth of investments in that POGO hub ended up.