₱7-B revenues not enough to justify POGO crimes in PH, senators say

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"Why are we so in love with POGOs?" Senator Franklin Drilon asks

Metro Manila (CNN Philippines, March 5) — Offshore gaming companies continue to bring more harm than good in the Philippines, according to two senators who have expressed dismay that their presence is justified by a few billion pesos of revenues paid to the state.

Senator Richard Gordon led a committee inquiry into alleged crimes and stacks of cash brought into the country, which are believed to be channeled here for money laundering. Central to the discussions were allegations that these funds were being spent in Philippine casinos and online betting, so that the ill-gotten funds would suddenly appear legitimate. 

"Since the POGO came in our shores, all these things suddenly happened," Sen. Franklin Drilon said during the hearing of the Senate Blue Ribbon Committee.

READ: Senator says impact of 'social ills' by poor POGO regulation cannot be reversed

The Anti-Money Laundering Council (AMLC) said POGOs generate a mere ₱7 billion in net inflows, which is the money retained as a huge chunk of the ₱30-billion capital sent to the country are subsequently pulled back out. This translates to a "negligible" 0.04 percent of the domestic economy, the senator said.

Drilon also expressed disgust when POGO regulator Philippine Amusement and Gaming Corporation (PAGCOR) said it is still in favor of offshore gambling based here, as these are sources of taxes for the state.

"I am disappointed at the statement of PAGCOR saying [they] are in favor of POGO continuing in our shores because of the income we earn — such a short-ranged statement," the senator said, even calling it a "stupid" mindset.

"The social problems they have brought in our country is not worth the regulation fees that you earn," he added. "Why are we so in love with POGOs?"

The Philippine National Police reported 10 police operations versus POGO sex dens, which mostly cater exclusively to Chinese workers. Some 199 women who got involved in prostitution have been rescued. There have also been 73 casino-related kidnapping cases in the last three years, which targeted Chinese nationals.

READ: Pagcor willing to shut down POGOs if crimes, tax issues not resolved

RELATED: Two POGO workers arrested for the kidnapping of fellow Chinese nationals in Cebu

Two residents of the Multinational Village in Parañaque also appeared in the hearing, exposing the unrest that hundreds of their new Chinese neighbors said to be POGO employees brought to their community.

'Slow to act'

The AMLC also got a scolding from the lawmakers, saying it did not act fast enough to curb the huge sums of foreign currencies which have made their way into Manila, brought in by what Gordon dubbed as the "Rodriguez" group. Cold cash brought in through airports have amounted to $633 million, or around ₱32 billion, in 890 entries from September 2019 to date.

Gordon said there are about five syndicates involved in this scheme, but which bring in money in US dollars, Japanese yen, Hong Kong dollars, and other foreign currencies.

Rather than running after the 5 percent franchise tax charged from a POGO's gross gaming receipts — which a legal opinion from the Office of the Solicitor General has disputed — Gordon said authorities should just focus on seizing the big bucks being brought in by suspected Chinese syndicates.

READ: QC-based POGOs issued notices of violation over business permits

The Bureau of Internal Revenue said separately that it collected ₱6.42 billion in POGO taxes in 2019. Meanwhile, PAGCOR said these firms have remitted ₱18 billion since 2016, coming from 61 operators and 240 service providers in business.

Pagcor added that there are over 100 unlicensed POGO outlets under investigation.

Existing central bank rules dictate that handcarried cash beyond $10,000 should be declared upon entry to the Philippines. Failure to declare or understating the amount would render these as illegal importation or smuggling, Customs Commissioner Rey Guerrero said. But AMLC Executive Director Mel Georgie Racela said money cannot be treated as goods, and should be treated as intelligence information to establish trends, discover crimes, and unearth illegal money deals.

"How can a government agency like PAGCOR say 'sayang naman 'yung pera?' Kung kinuha natin 'yung perang pinasok dito na umaabot na ng $600 million... hindi ba, malaking bagay?" Gordon said, adding that the haul could fund big infrastructure projects, upgrade military equipment, and pay off the country's foreign debts.

For Gordon, these illegal acts prove that the country's defenses and border control are down. He said other nations like the US have very strict protocol to guard against big money flows.

Racela added that the AMLC saw around 14 billion out of the total 54 billion fund transactions involving POGOs as "suspicious." He said investigations are ongoing.

RELATED: Pagcor, BIR not yet closing illegal POGOs despite Duterte's ultimatum