Repeating fallacies will not save POGOs

Pagcor Chairman and Chief Executive Officer Alejandro Tengco

WITH each passing day, it seems the news brings us new revelations of crimes and corruption associated with Philippine offshore gaming operators (POGOs), which the Philippine Amusement and Gaming Corp. (Pagcor) has tried — unsuccessfully — to destigmatize by rebranding them as IGLs, or international gaming licensees. We have more than once in the recent past issued a call for a total ban on POGO businesses, but the appearance on the front page again this week of the same shortsighted supporters of the POGO sector repeating the same fallacious arguments in an attempt to scare the country into not taking action compels a response.

In statements issued this week, Pagcor Chairman and Chief Executive Officer Alejandro Tengco, the Association of Service Providers and POGOs (Aspap), and Albay Rep. Joey Salceda, who chairs the House Committee on Ways and Means, again sought to slow the momentum toward a POGO ban with warnings of dire social and economic consequences if it is carried out. Tens of billions of pesos in revenues would be lost, they say, and tens of thousands of Filipinos would lose their jobs. It is unreasonable, they say, to punish an entire industry, and by extension, the well-being of the country at large, because of the violations committed by "a few bad apples." Pagcor, in particular, which is really the only entity that stands to lose something by the elimination of POGOs, even darkly warned that the atrocious level of criminal activity would increase in case of a ban because the operators would simply go underground.

The latter of these arguments is the most specious. Banning POGOs entirely is, in fact, precisely the solution to the plague of "illegal operators" who are engaged in various cybercrimes, money laundering and human trafficking and whose presence and activities exacerbate criminality in the areas where they are located. Allowing "legal" POGOs simply provides a gateway for nefarious actors, a means by which they can enter the country and set up shop. A complete ban would remove this "gray area" entirely, making it easier to identify and stop illegal operations simply because no operation of the sort would be allowed to exist in the first place.

Exaggerated financial benefits

In terms of the claimed contribution to the economy in financial terms, we take that with a very large grain of salt since almost no evidence is offered to support the claims, and the POGO backers cannot even seem to get their stories straight. Pagcor claims the government would lose more than P20 billion in revenues annually in the event of a ban, but on the other hand, Aspap claims the figure is closer to P61 billion. Meanwhile, actual statistics indicate the figure over a three-year period is about P17.7 billion. We suspect the latter figure, which amounts to about P6 billion per year, is probably closer to reality, but even if the figure is much higher, does it compensate for the losses to communities and individuals through criminal activity and other economic consequences such as inflated prices for property, goods and services? We submit that, in the absence of credible data proving otherwise, it does not.

Potential job losses for Filipinos are another key argument used by POGO advocates, and it is true that a ban would result in thousands of people being put out of work, at least temporarily. Even here, the numbers are uncertain; the figures presented range from 23,000 to 31,000. The government would clearly have to consider the welfare of Filipino POGO workers in imposing a ban, but that would certainly be manageable. And, to look at things in a more positive light, a ban would release thousands of skilled IT workers, very much in demand in other enterprises, to fill more productive positions with greater added value to the economy.

And as one final detail, a ban on the POGO industry has potentially positive geopolitical implications. China, which properly views POGOs as a method for its citizens to evade a near-total ban on gambling in their country, has for years been urging the Philippines to get rid of them. With tensions at an all-time high, the matter very well may be a mutually beneficial point of agreement that can help create further dialogue over disagreements.