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

Robie de Guzman   •   May 8, 2020   •   606

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.

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)

PH gov’t allows POGO partial operations amid community quarantine

Robie de Guzman   •   May 1, 2020

MANILA, Philippines – The government has allowed the Philippine Offshore Gaming Operators (POGO) to resume partial operations amid the enforcement of community quarantine against novel coronavirus disease (COVID-19).

The Philippine Amusement and Gaming Corporation (PAGCOR) said POGOs have been allowed to partially reopen, subject to stringent conditions.

PAGCOR said that prior to the resumption of operations, POGOs and their service providers are ordered to strictly adhere to the following pre-requisites:

  • Updating and settlement of all their tax liabilities, as certified by the Bureau of Internal Revenue;
  • Updating of their payments for any regulatory fee, license fee, performance bond or penalties due to PAGCOR;
  • Remittance of regulatory fees for the month of April;
  • Must pass the readiness to implement safety protocols

The PAGCOR also assured they will impose safety protocols on POGOs to ensure that its employees will be protected from infections and the spread of the virus in their communities will be avoided.

These safety measures include:

  • The permission of only 30 percent workforce per shift in authorized operating sites;
  • Provision of shuttle services for employees from their places of residence to their offices;
  • Temperature checks upon entry at the office premises;
  • Practicing social distancing, proper sanitation and disinfection, and
  • Wearing of mask at all times, among other important guidelines to curb the infection

Meanwhile, POGO employees who are confirmed COVID-19 cases, including those who are suspect or probable cases, will not be allowed to work.

“The vulnerable groups, including the sick, immunocompromised, seniors, pregnant women, and those with co-morbidities will not be deployed,” PAGCOR said.

“Those who will report back to work – whether Filipinos or foreign nationals – must be tested for COVID-19 and must obtain a negative test result from a testing facility duly-registered with the Food and Drugs Administration,” it added.

POGOs are also required to establish an isolation room for employees who may start to exhibit symptoms of the virus.

“Even with the partial resumption of POGO operations, we will put premium on the safety of their employees, and the gaming industry as a whole,” the agency said.

“While we recognize their huge contributions to nation-building, and their great viability as a funding source in these difficult times, we still have to practice extra precaution in striking a balance between health and economic benefits,” it added.

PAGCOR Chairman and CEO Andrea Domingo said the decision to allow POGOs’ partial operations was reached with the intention of helping the national government raise necessary funds to combat the novel coronavirus (COVID-19) pandemic.

Citing the revenues from POGOs as a significant source of funds that would supplement efforts to curb the health crisis, Domingo assured that the management followed the  guidelines provided by the government under the Enhanced Community Quarantine (ECQ).

The agency said that its decision likewise seeks to preserve the employment of 31,556 Filipinos who were directly hired by said industry; and create ripples in the country’s economic activity such as the real estate industry as POGOs occupy 1,000,000 square-meter of office space.

Domingo said POGO operations were allowed to partially reopen under Information and Communication Technology-Business Process Outsourcing (ICT-BPO) exemption.

Businesses classified under ICT-BPO are those that are involved in non-primary business and functions, which will be allowed to operate under the existing community quarantine rule.

With the partial resumption of POGOs, Domingo said that functions of law enforcement agencies will continue, and sanctions and penalties will apply to POGO licensees and service providers who will be found in violation of PAGCOR’s pre-requisites and security protocols, and of the Inter-Agency Task Force’s (IATF’s) orders.

PAGCOR will also coordinate with local government units in monitoring POGOs compliance to protocols while the IATF will conduct inspections.

Senators oppose resumption of POGO operations to aid gov’t COVID-19 response

Marje Pelayo   •   April 22, 2020

MANILA, Philippines – Several senators expressed opposition against a proposal to resume operations of Philippine Offshore Gaming Operators (POGO) in the country allegedly to raise funds to support the national government’s response against coronavirus disease (COVID-19) pandemic.

During a live broadcast aired through Facebook by the Presidential Communications Operations Office (PCOO), Palace Spokesperson Harry Roque highlighted the contribution of POGO industry as among the government’s sources of funds.

Ang POGO po ay kabahagi siguro ng industriya na nagbibigay ng cash resource sa presidente, sa ating pamahalaan sa pamamagitan ng buwis. Ang tatanungin po natin, (ano) ang risk na pino-pose ng operation ng POGO?” Roque said.

[POGO contributes to the cash resources of the President and the government in the form of taxes. If we may ask, what risks do POGO operations pose?]

But according to Senator Joel Villanueva, POGO is a ‘high-risk sector’ as its workforce is mainly comprised of Chinese nationals.

“It has a huge potential of spreading the disease because there are several workers working in an enclosed area and are residing in high rise condominiums,” the Senate Committee Chair on Labor and Employment.

Villanueva also argued that most POGOs in the country don’t pay government taxes which is enough reason not to allow their operation.

Meanwhile, Senate Minority Leader Senator Franklin Drilon said he is totally against the proposal.

“The resumption of POGO will not serve the rationale for a partial lifting of the ECQ to enable essential industries to operate. Since when did POGO become an essential industry?” he said.

Opposition Senator Francis Pangilinan raised the question: why not prioritize employment for Filipinos affected by the enhanced community quarantine (ECQ) than paying attention to Chinese businesses such as POGO?

Boost state funds? DOF na nga ang nagsasabi na ni hindi nga nagbabayad ng bilyong-bilyong pisong buwis ang mga ‘yan, [It’s the (Department of Finance) that confirms those (POGOs) do not pay taxes,]” he added.

Senate Pro Tempore Ralph Recto, for his part, said he might agree to the idea only on a work-from-home setup.

“If not (work from home), It’s non-essential. I would rather allow construction workers and farmers to go back to work,” he said.

Another opposition Senator Risa Hontiveros, meanwhile, stressed that China owes the Philippines big time.

The lady senator said the government should press China to pay over P200-B for environmental damages in West Philippines Sea and about P50-B for unpaid taxes from previous POGO operations.

“POGOs are simply not worth it, and it’s way past time to say goodbye to POGOs,” she said.

Hontiveros vowed to study the possible filing of a resolution that would move China to face its arrears. MNP (with reports from Harlene Delgado)

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