Philippine government agencies set out the benefits and risks of allowing Philippine offshore gaming operators, or POGOs, at a House hearing on Wednesday, October 19, 2022, as the Marcos administration weighed whether the industry should continue1.
The National Economic and Development Authority told the hearing that POGOs had contributed P53.1 billion in 2022, equal to 0.31% of gross domestic product. That is well below the P104.5 billion recorded in 2019, at the peak of POGO operations, when the industry accounted for 0.67% of GDP1. Tax collections have fallen in the same direction. Finance Undersecretary Maria Magno said taxes from POGOs reached P7.38 billion in 2021, down from P12.46 billion in 2020 and P14.44 billion in 20191. Magno said discontinuing POGO operations would cost the country P64.6 billion in direct economic contributions, or 0.3% of GDP1.
On employment, the Philippine Amusement and Gaming Corporation said 7,534 Chinese work in accredited POGOs, 18% of the total workforce, implying some 41,855 POGO workers. Of the total, 47%, or 19,671, are Filipinos1. The Association of Service Providers and POGO gave different figures through spokesperson Mike Danganan: 11,776 Filipino direct hires and 11,342 indirect hires1.
| Measure | Figure |
|---|---|
| POGO contribution, 2022 | P53.1 billion, 0.31% of GDP |
| POGO contribution, 2019 peak | P104.5 billion, 0.67% of GDP |
| Taxes collected, 2021 | P7.38 billion |
| Taxes collected, 2020 | P12.46 billion |
| Taxes collected, 2019 | P14.44 billion |
| Chinese workers in accredited POGOs | 7,534, or 18% of workforce |
| Filipino workers | 19,671, or 47% of workforce |
NEDA also flagged suspicious cash flows. Data from the Anti-Money Laundering Council showed P14 billion of the P54 billion in POGO transactions from 2017 to 2019, or 26%, were deemed suspicious1. The Department of Finance, citing a study of 67 countries, said one crime incident per 100,000 people can cut GDP growth by 1%, and estimated the Philippines risked losing between P16.7 billion and P26.2 billion in foreign direct investment because of POGO-related crimes1.
"Given the government's desire to attract more employment-generating investments, both local and foreign, the existence and effects of such fraudulent activities do not bode well in creating an economic environment conducive to these investments."
On tourism, NEDA said the Philippines risks losing Chinese visitors if Beijing imposes a total tourism ban to pressure President Ferdinand Marcos Jr. to stop POGOs. China ranked second in arrivals in 2019 with 1.74 million, behind South Korea. Arrivals fell to 17,454 in 2020 and 6,615 in 2021, with 23,483 Chinese visiting so far in 20221. On property, Leechiu Property Consultants said POGOs have vacated 630,000 square meters of office space since the first quarter of 2020, and that a full exit of the remaining POGOs, which occupy 1 million square meters, would mean P18.9 billion in lost annual office rentals1.
What it means for players
POGOs serve customers abroad rather than players inside the Philippines, so the hearing concerned the industry's wider effects rather than the rules for domestic gamblers. The figures presented cover tax revenue, jobs, office space and tourism, and no change to licensing or player-facing rules was announced at the hearing1.
For anyone gambling in the Philippines, the practical position after October 19, 2022 was unchanged: the industry remained under review by the Marcos administration, and no decision on its future had been reported1.
What happens next
The hearing produced no decision. The Marcos administration was still weighing the social and economic costs of allowing online gambling to continue, and no date for a ruling has been reported1.
Sources1 sources
- IN NUMBERS: Risks, benefits of POGO operations, rappler.com
