POGOs contribute ₱34.68B to PH economy annually — Gatchalian

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Metro Manila (CNN Philippines, October 11) — Philippine Offshore Gaming Operators (POGOs) are annually pumping the economy with multibillion-peso contributions, a share that is "a cause for concern" once abruptly abandoned.

During Tuesday's hearing, Senator Sherwin Gatchalian, chairman of the Senate Ways and Means Committee, said the sector is directly and indirectly contributing ₱34.68 billion to the Philippine economy.

Breaking this down, he said the single top POGO contribution is ₱10.188 billion in real estate taxes (29.37%).

Leechiu Property Consultants CEO David Leechiu, who was also at the hearing, echoed this, noting the industry stands to lose ₱19 billion in rental income if POGOs exit the country.

Leechiu also said an abrupt pullout of the industry could cause "vacancies across the property sector, and a big chunk of that will be in the residential sector."

Real estate taxes were followed by ₱7.465 billion in taxes on retail stores selling household items, communications devices and other goods (21.52%), and ₱7.260 billion representing the sector's 5% franchise tax (20.93%).

The ₱34.68 billion translates to 1% of gross domestic product.

"This [presentation] is based on our own simulation. Would 1% GDP contribution warrant the continued existence of POGOs? Assuming worst case, will that impact on our economy? Would one percent be a significant negative effect on the economy?" Gatchalian asked during the session.

Finance Undersecretary Bayani Agabin responded, saying the 1% effect on GDP would be "quite big and a cause for concern."

But Agabin said the Philippines can still recover the potential losses from foreign investors and boosted tourist arrivals.

Senate President Migz Zubiri earlier today said the Philippines has been placed under China's blacklist of tourist destinations due to issues hounding the POGO industry, including kidnapping cases. 

On Monday, the Association of Service Providers and POGOs (ASPAP) said more than 23,000 Filipino workers might lose their jobs if the business is banned.

However, since ASPAP represents less than half of PAGCOR-licensed POGOs, the number of Filipinos who would be affected "is definitely much higher."