Senate probe into PAGCOR’s alleged lobby for POGO’s quarantine exception sought

Robie de Guzman   •   May 8, 2020   •   1100

MANILA, Philippines – Opposition Senators Francis Pangilinan and Risa Hontiveros are calling on their fellow lawmakers to conduct an inquiry in aid of legislation into the alleged lobbying of the Philippine Amusement and Gaming Corporation (PAGCOR) to exclude Philippine Offshore Gaming Operators (POGO) in the COVID-19 quarantine.

In a joint statement, Pangilinan and Hontiveros said they have recently filed Senate Resolution 396 after PAGCOR allowed POGOs to resume partial operations, subject to strict conditions, purportedly to boost government revenues amid the COVID-19 pandemic.

The senators said that the gaming regulator’s “actuations in lobbying for an exception in favor of the POGO industry threaten to unduly put the health and well-being of the Filipino people at risk by undermining the enhanced community quarantine (ECQ).”

“Even going by the official estimate, allowing more than 50,000 workers in the online gambling industry to return to work represents a substantial exception to the ECQ rules,” they said.

PAGCOR chairman Andrea Domingo earlier argued that licensed POGOs should be allowed to resume operations as these are part of the Business Process Outsourcing (BPO) sector.

BPOs have been allowed to operate amid the quarantine period.

Domingo earlier assured that before POGOs were allowed to resume partial operations, they would have to meet safety and health requirements.

But Pangilinan and Hontiveros both expressed apprehension that the partial reopening of POGO operations could “reverse the efforts put in place to stem the spread of COVID-19”as there is no assurance that POGOS will follow the Department of Health’s guidelines on physical distancing, wearing of masks, and frequent handwashing and sanitation.”

The IT and Business Process Association of the Philippines (IBPAP) have also rejected that POGOs are part of the BPO industry, citing four key differences:

  • BPO companies are registered with the Philippine Economic Zone Authority (PEZA) or the Board of Investments, while POGOs are registered with PAGCOR,
  • the offshoring nature of POGOs are allegedly because they are unable to practice their betting or gambling functions in their respective shores,
  • IT-enabled jobs BPO companies create are of much higher value, requiring a range of technical, domain, and soft skills, and
  • BPOs come to the Philippines to leverage off the country’s human capital, like strong English and technical skills, customer service orientation, malasakit, and ability to adapt to foreign cultures. On the other hand, majority of POGO staffing comes from foreign labor brought into the country to support their operations.

According to IBPAP, POGOs are not part of the annual IT-BPO Headcount and Revenue report, which in 2019 ended with 1.3 million direct employees and $26.3 billion in revenues, the senators said.

PAGCOR also argued that revenues from POGO operations can be a significant source of funds for the government’s COVID-19 response.

It also said that operators are ordered to pay all tax obligations up to March 2020 before they will be allowed to resume operations and only registered workers cleared in COVID-19 rapid tests to report back to work.

But Hontiveros and Pangilinan pointed out that during a Senate hearing in February 2020,

the Bureau of Internal Revenue revealed that POGOs failed to pay the government an estimated P50 billion in withholding and franchise taxes in 2019.

The senators said the uncollected taxes of POGOs could be a source of additional government funds for COVID-19 response.

“[But these] taxes need to be collected regardless of the industry’s status of operations during the community quarantine,” they said.

The senators also pointed out that the resumption of POGO operations will have minimal impact on the country’s economy.

They cited records from the Anti-Money Laundering Council (AMLC) showing that the industry only accounts for 0.04% of the domestic economy.

Earlier this week, a group of House lawmakers filed a bill seeking to have POGOs declared illegal by prohibiting the operations of any offshore gaming by any means or device within Philippine territory.

Senate approves POGO tax bill on third, final reading

Aileen Cerrudo   •   June 3, 2021

With votes of 17-3-0, the Senate has approved the Philippine Offshore Gaming Operators or POGO Tax Bill on the third and final reading.

Senate Bill No. 223 which President Rodrigo Duterte certified as urgent seeks to impose additional taxes on POGO.

The Gross Gaming Revenue or receipts from POGO’s gaming operation will have 5% tax. The gross income of all alien employees of offshore gaming licensees and service providers will also be imposed with 25% withholding tax.

According to Senator Pia Cayetano, chair of the Senate Ways and Means Committee and sponsor of the bill, an estimate of P28.7 billion worth of taxes will be collected in 2021 once it becomes a law. Meanwhile, an estimate of P32 billion will be collected in 2022.

However, several Senators do not agree in approving the said bill. Senator Risa Hontiveros said online gambling should not be the main source of income for foreigners in the country. She also reported crimes and syndicates where several POGO employees are involved.

“I think it is important for this chamber, Mr. President, to take a stronger position against online gambling and the illicit activity it has brought to our shores,” she said.

Senator Francis Pangilinan also agreed with Hontiveros.

“Indeed, whatever amount the BIR collects from POGOs may be used to fund projects to give relief to our people’s suffering during this pandemic. However, we cannot and should not turn a blind eye to the social costs that the POGO industry brings and has brought upon us,” he said. AAC (with reports from Harlene Delgado)

75 poker chip sets, other gambling paraphernalia seized at NAIA

Marje Pelayo   •   December 9, 2020

MANILA, Philippines — The Bureau of Customs (BOC) stationed at the Ninoy Aquino International Airport (NAIA) intercepted 38 parcels with 75 poker chip-sets and other gambling paraphernalia imported in the Central Mail Exchange Center (CMEC). 

The seizure, held in coordination with the Philippine Postal Corporation (Philpost), discovered the said gambling items without the required permit from the Philippine Amusement and Gaming Corporation (PAGCOR).

Thru the vigilance of BOC-NAIA frontliners, Customs Intelligence & Investigation Service (CIIS-NAIA), Enforcement and Security Service (ESS-NAIA), X-ray Inspection Project (XIP-NAIA), shipments were apprehended in violation of Section 119 (b) of the R.A. 10863 or the Customs Modernization and Tariff Act (CMTA).

The intercepted poker sets, dealer chips, and other gambling paraphernalia shall be turned over to the Auction and Cargo Disposal Division for safe keeping pending seizure and forfeiture proceedings.

After the finality of Decision of Forfeiture, the forfeited gambling paraphernalia shall be turned over to PAGCOR pursuant to Section 1147 (b) of the CMTA (Disposition of gambling outfits, apparatus, paraphernalia).

The operation is in line with the BOC’s intensified enforcement and prosecution of smuggling drives spearheaded by Customs Commissioner Rey Leonardo Guerrero.

Malacañang denies ‘favoritism’ claims in partial resumption of POGO ops

Marje Pelayo   •   May 4, 2020

MANILA, Philippines — The national government has recently allowed partial resumption of operations for Philippine Offshore Gaming Operators (POGO) in the country despite the prevailing enhanced community quarantine (ECQ) against the spread of the coronavirus disease (COVID-19).

Malacañang has been accused of favoritism over its decision but Presidential Spokesperson Secretary Harry Roque said the business process outsourcing (BPO) sector has long been allowed to partially operate and that covers the POGO industry. 

He added that the decision as to which industry will be allowed partial opening depends on the Bureau of Internal Revenue (BIR) and the Philippine Amusement Gaming Corporation (PAGCOR) especially when POGOs do not have liabilities such as tax issues to settle.

Wala pong favoritism diyan, [There is no favoritism here,]” Roque said.

“On the contrary, the equal protection clause that provides that all those similarly situated must be treated alike so dahil isang klase ng BPO ang POGO, kinakailangan mapabuksan din sila [and so, since POGO is a type of BPO, they should be allowed to open] be it ECQ or GCQ,” he added.

But the IT and Business Process Association of the Philippines (IBPAP) countered this claim, saying POGOs cannot be considered as part of the BPO sector.

“The IT and Business Process Association of the Philippines (IBPAP) would like to have it clarified that as far as the IT-BPM industry is concerned, Philippine Offshore Gaming Operators or POGOs, as they are commonly called, cannot be considered as Business Process Outsourcing (BPO),” said IBPAP president and CEO Rey Untal on Saturday..

Untal said though BPOs and POGOs may have similarity in the nature of operation which is offshore, he said POGOs primarily do so because they are unable to practice their gambling functions in their own shores.

“BPOs come to the Philippines to leverage off our human capital, i.e. our strong English and technical skills, customer service orientation, malasakit, and ability to adapt to foreign cultures,” Untal said.

“This, in turn, has directly benefited millions of Filipinos by providing them with better employment opportunities throughout the years,” he added.

IBPAP also stressed that BPO operations are regulated by the Philippine Economic Zone Authority (PEZA) while POGOs are only monitored by PAGCOR.

Senator Ronald Dela Rosa, for his part, expressed support for the resumption of POGOs as they are deemed essential as a source of additional funding to support the national government response amid the COVID-19 crisis. MNP (with reports from Rosalie Coz)

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