Chinese-run POGOs Under Fire in Philippines

Duterte’s decision to reopen Chinese offshore gambling operations in Manila as an ‘essential service’ has received heavy criticism and backlash. The Philippines President has been accused of regulatory agencies and by members of his own government as sopping to China’s influence. Despite this, Duterte continues to deliver the resulting economic gains, and vehemently defends his pro-POGOs political stance.

Manila skyline.

Manila has become a hotbed for financial crime and illicit activities according to various government agencies. The Chine-run POGOs are at the forefront of the issue, and public discourse surrounding their controversial existence is rapidly changing. ©gloverbh222/Pixabay

In the past weeks, the government of the Philippines has gradually moved closer towards easing the lockdown and trying to restart the economy before the onset of a significant recession. Central to the economic prosperity of the Philippines capital, Manila, is the financial coupling that exists between Chinese-run Philippines Offshore Gambling Operations, or POGOs as they’re commonly referred.

Philippine Offshore Gaming Operations are exclusively run by Chinese nationals and have become notorious as crime and corruption hotbeds. Citizens of Manila know all too well the financial power these institutions hold, paying huge concession fees to the local government helping drive growth and prosperity throughout the local economy.

The decision to re-open POGOs has not been taken lightly, government agencies have conducted independent reviews and risk-assessments prior to their re-commencement. The Inter-Agency Task Force on Emerging Infectious Diseases leading the decision stated that a series of stringent conditions must be upheld to ensure their safety, including a cap on the number of employees working per shift and for workers to test negative for COVID-19 before being allowed on the premises.

The past six have seen a number of crucial industries including food production factories and Business Process Outsourcing (BPO) industry have begun operations following similar guidelines. By allowing them to reopen in a climate where the vast majority of Filipino-run businesses have been shut down, Duterte’s government has effectively endorsed POGOs as an essential service. This implicit designation hasn’t gone unnoticed, indeed, it has provoked a viral firestorm of criticism which has brought serious questions about the ongoing viability of Philippine Offshore Gaming Operators.

Anti-Beijing Sentiment Gaining Momentum

There is a stench of corruption in Manila, and those that would prefer to see Beijing’s overriding influence in the Philippines drastically reduced are gaining political force. Swathes of Duterte’s top supporters and legislators have already indicated their feelings. Last week an unprecedented legal motion was tabled, which took aim at POGOs preferential treatment and aims to ban them outright.

The bill has been commended to the legislature on the grounds that POGOs represent an unquantifiable “social menace” and a “source of unimaginable corruption”. Leading the proceedings was the House opposition leader, Bienvenido Abante Jr. In his bill, he lashes out against the belligerent actions of online casino bosses throughout the Philippines and the blatant corruption that exists within the POGOs themselves.

Addressing the criticism of his plans that POGOs are a necessary evil, and the Philippines profits from their existence, he states,

POGOs operations cannot be justified by the amount of revenue that may be derived therefrom, for such revenue no matter how big it may be, would be totally wiped out by the irreparable harm that results to individuals, families, and society in general.Bienvenido Abante JrHouse Minority Leader, Philippines Government

The societal harm being inflicted from unregulated online gambling companies is not the only aspect troubling officials in Manila, but their national pride is at stake too. The anti-money laundering laws of the Philippines are being made an absolute mockery of under the current state of affairs. Legislators holding immense political power within the country have already vowed to investigate the identities of those who granted licenses, expose the corruption, and highlight the illicit activities.

There are also serious questions being raised with regard to the actual financial benefit of the Chinese-run POGOs. According to data obtained by the Philippines Bureau of Internal Revenue, almost all of the POGO service providers are not meeting their present tax obligations, and many are falling behind on income and franchise tax liabilities. Accountants at the Anti-Money Laundering Council estimate this total unpaid tax to be almost $1bn.

POGOs Being Investigated for Money Laundering

Besides the deep resentment that the Philippines government already holds towards the Chinese-run POGOs, there is a more serious allegation that these businesses are being used to launder money. The Anti-Money Laundering Council agency has already earmarked over $276m of suspicious transactions, amounting to tax evasion, offshoring, and drug trafficking.

With the public sentiment now turning sour against the POGOs and indeed China itself, the Chinese Embassy in Manila has been attempting to disrupt public discourse, releasing a series of propaganda videos that appear to portray China as a benevolent friend of the Philippines and assisting them throughout the COVID-19 pandemic. Philippines state-run radio has also been jumping in on the furor, airing a swathe of pro-China content which has drawn heavy criticism.

All of this is ongoing amidst the backdrop of Duterte’s insistence that POGOs represent an essential service to the Philippines people, and yet closing down large sections of the working economy. In defiance of many of his own supporters, party officials and government ministers, Duterte continues to be a servant of China’s off-shore gambling economic interests.

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