Press Release
March 11, 2020

Senator Win Gatchalian's ANC: Early Edition interview on
COVID-19's social and economic impact and POGOs

[start recording]

Q: Good morning, Sir and thank you for joining us.

SEN WIN: Good morning, Christian.


Q: The Philippine government has implemented a number of measures to prevent what they fear could be a sustained community transmission. But in your case, you are trying to push the envelope further and in particular, suspending graduation and moving up ceremonies. Is this really needed?

SEN WIN: Well, the daycare graduation will start next week. And then, the moving up ceremonies and senior high school graduations and the tertiary graduation will commence two weeks from now and so on. Typically, in a graduation and moving up ceremonies, you have families from abroad. We have OFWs coming back and participating in the ceremonies. So we have people from abroad coming in and also the congregation of people in one single place. What we're urging the DepEd and CHED for this matter is to suspend it first because the situation is changing very rapidly ever yday. In the last three days, we have seen an increase in the COVID incidences. Almost 20 number of people and we expect this to escalate even further so this to encourage our kababayans to make plans ahead of time. Those OFWs coming in, they should be, as early as now, to tell them that this type of ceremonies and graduation will be suspended until further notice. We will not cancel it because this type of ceremonies is very important to families. Gustong naman nila makita ang kanilang anak na maglakad sa entamblado, but to stop the transmission and to prevent the possibility of OFWs coming in inadvertently, possibly bringing in some of the viruses outside, we have to tell them in advance that it will be suspended until further notice.

Q: If that's your proposal, why not come up with other proposals that could actually further help prevent the sustained community transmission. In this case, the people are pushing the government to implement already lockdown of certain areas not to wait until more cases are recorded.

SEN WIN: Lockdown is difficult to implement unless you are like China who can really flex its muscles and lockdown the entire provinces. If you see the experience of Italy, when they lockdown the entire country, it is very difficult to implement because you have a lot of entry and exit points. I want to urge the DOH to study the Korean model wherein they didn't lockdown Korea but they implemented a massive testing activity wherein they already tested 140,000 patients there. Meaning, if you already feel something, whether you have history of traveling abroad or just within Korea, you have to be tested.


Q: One problem is we don't necessarily have that big a number of testing kits.

SEN WIN: Correct. The locally invented testing kits from UP is a game changer in terms of curving COVID-19 in our country. Game changer, meaning, because it is affordable, it's locally available and can be given to local governments. Right now, the local governments have a protocol, so first they ask if you have traveled abroad. Kapag hindi ka nagtravel abroad and then you are sick, you are not brought to RITM to be tested. Right now, we have seen local transmissions. We have seen people who haven't traveled abroad but they are contracting the disease. So we are thinking, give these testing kits at the local level and test it as fast as possible. Implement that Korean model where they test everyone who feels that they are sick and they can contain the disease in their homes limiting their movement within the community.

Q: But do we have the resources to actually fund such a massive testing of possible cases?

SEN WIN: Correct. That is why there are two important things here. One, the kits should be very affordable. It can be given to the local government, they can be tasked to do this. Of course, subject to very strict protocols and guidelines of the DOH. Two, this is where Congress will come in to allocate additional budget to buy these testing kits and also additional budget to make sure that protocols will be followed. But the protocols are very costly because you need to buy protective suits, specialized vehicles, additional power and training.

Q: How about the possibility of passing a supplemental budget? This is the last day of session before you go on break by tomorrow.

SEN WIN: The President can call for an emergency session, if need be. If the President thinks that there's an urgent matter. For example, a supplemental budget to give DOH and other government agencies additional funding for them to conduct testing and also to conduct other mitigating measures, he can call Congress to convene.

Q: Do you think the President should call for an executive session?

SEN WIN: This situation is changing very rapidly. This should already be in the horizon. The DOH and also the economic managers should already think about this because the situation is changing very rapidly. In situations like this, we should already start planning for the worst. Of course, we hope for the best, again, the testing kits are already here but we have to already plan ahead of time because the situation is rapidly evolving.


Q: Yesterday, the House Appropriation Committee approved the proposed 1.6 billion supplemental budget but again, you are going on break starting tomorrow so what do you think? Should there be a special session to talk about this particular supplemental budget to make sure that funding would go for those projects that you mentioned?

SEN WIN: Correct. If need be, if the Senate needs to be called and to convene and to approve this, we are ready to approve the supplemental budget and also to other stimulus packages. Definitely, our economy will be hard hit by this virus and we are forecasting a very slow growth in the first quarter. We need to pump the economy, we need to spend as fast as we can, we need to inject new budget in order to boost up the economy.

Q: What kind of a specific stimulus package are you thinking of?

SEN WIN: I'm thinking of looking at the tourism industry because it will be badly hit. We have airlines, shipping lines, hotels and I am worried of the small and micro businesses--the tour guides, the drivers, the bangkeros in the island, they will be badly hit with the slowdown in tourism. We need to have some stimulus packages that can cascade down to the small and micro businesses.

Q: Like what proposals are you thinking of as part of the stimulus package?

SEN WIN: The fastest way is cash transfer and also subsidies to the tourism sector especially small and micro businesses. For example, incentive packages or direct subsidies to these business so that they can survive the slowdown in tourism in the next three to six months.

Q: Yes, because I think one concern also is a lot of employees, for example, in the labor sector are thinking that this is just a temporary problem.

SEN WIN: Correct. Well, I know for a fact that some of the airlines are already calling for forced leaves. They are now asking their employees to do forced leaves. Some of the hotels are also doing the same. We just have to make sure that we have the available funds to help them survive for three to six months. It will be very difficult for them, to recover after that. We need to have a bridging stimulus program in order to boost industry players to survive.

Q: Are Senators already in touch with the economic managers to discuss of the stimulus package?

SEN WIN: Definitely. On our won, we are also studying this issue. We have numbers in mind.

Q: What numbers? For tourism industry, for example?

SEN WIN: In our own computation, we will need about 28 billion only for the tourism industry. Although again, the situation is changing very rapidly. If some of the cases will sprout in some of the provinces, especially tourism-related provinces, you will see a lot of impact in tourism-related provinces.

Q: Yes because there is a lot of economic activity that is affected by this.

SEN WIN: Correct. Definitely, it really depends on how the evolution of this trials will be. If this will be contained in Metro Manila, then some of the provinces will continue to conduct their business in their tourism areas but if it will spread in other tourism areas related provinces, then we will have to increase the budget in order to support them.

Q: The P28 billion stimulus package for the tourism industry that you have in mind, what is the time frame of this when it comes to lingering effect of COVID-19?

SEN WIN: In our computation, it will be available in the next three to six months and the mechanism should enable the government to cascade it down in micro and small businesses. From what I said earlier, the tourism isn't only limited to hotels and airlines, you also have tour guides, the bangkeros, the drivers of the vans and these people will be very hardly hit.

Q: Of the 28 billion stimulus package, is it purely concentrated on cash transfers?

SEN WIN: Depends. It will be mix of subsidies, incentive packages, it will be mixed.

Q: How does incentive package work?

SEN WIN: For example, in hotels, they can lower down the rates and then the government can come in also and support the lower down of rates to give additional support in terms of their operations. Incentives, in a sense, can lower down the rates so they can attract the customers then government can come in in terms of the incentives. For example, internally in conferences and meetings even within the country, I know for a fact that a lot of local conferences are being canceled, a lot of local meetings are being cancelled and also a lot of tour packages are cancelled for the summer. Even our local tourism industries are being hit by cancellations within the Philippines.

Q: The 28 billion package that you mentioned is only limited for the tourism industry. How about for other sectors that are being affected and will be affected?

SEN WIN: Right now, we are still conducting the study because that is on a very large scale and the situation is changing very rapidly. For example, the supply chains, manufacturing will be hit. China has slowed down and definitely, the economy and output there will definitely slow down, and we supply components to China so lot of our manufacturing firms will also be hit in our country. That is the larger study that we are conducting.


Q: Yes, actually because they were saying study conducted by the ADB, in a worst case scenario, this COVID-19 threat could actually take of .59% of the total GDP then of course might affect more than 250,000--

SEN WIN: Correct, because we supply two factories in China we also supply two factories in Asia wherein they are experiencing slowdown right down and the inter-supply to America which is also slowing down because of the virus. The economic activity globally is slowing down, us being part of the supply chain will feel that crunch in the next few months.

Q: How about the minimum wage earners who are also affected by this slowdown because of the COVID threat?

SEN WIN: A lot of the job order workers, workers who are contracted because of a specific product, minimum wage earners, we will see some lay-offs in the next 3 to 6 months. The Department of Labor (DOLE) will be ready with some sort of package to support them, whether say cash transfer or other means to help them with their job, we have to be ready with that, that is a larger study definitely.

Q: Is there some portions of the GAA that can be used for the stimulus package?

SEN WIN: The initial reaction will be the Calamity Fund, the Calamity Fund is a broad fund that we can use in any form of calamity whether man-made, whether medical related or naturally related--we can tap into that right away, however if we need to increase it we can also implement a supplemental budget to augment that calamity fund.

Q: The supplemental budget that was passed in the house committee on appropriations, 1.6 billion? is that enough?

SEN WIN: This is meant to help the government to buy the equipment the necessary needs to fight the virus and definitely it's not part of the stimulus package that we are thinking--

Q: But for example aside from the protective equipment, you also need to provide more funds for government hospitals, will they be able to deal with the influx of patients?

SEN WIN: This is actually to prepare in an event that this will spread in communities, in other parts of our country, we have to already start preparing, we have to make sure that we have the capacity, we have the facilities and we have the equipment to treat the patients. So these are the things they need to forecast, in the first initial supplemental budget is just to prepare but since the cases are increasing rapidly we also have to prepare for the worst.

Q: What do you think of the way the DOH has been dealing with the outbreaks so far? During the last hearing in yout chamber, there was a lot of criticism that were hurled by some of your collegues on some members of the DOH supposedly because they were not prepared when it comes to testing possible cases, 2,000 testing kits with the population of more than 100 million?

SEN WIN: In due fairness to the DOH, I saw some of their statements and they said they this virus is inevitable, that it will come to the Philippines and they have been warning the public to be more proactive in terms of mitigating this virus by washing hands and conducting simple measures, however, the kits became the bottleneck and the kits as I understand it, it became a bottleneck because of cost and availability that's why the UP testing kits were broadcasted, it became a game-changer because it will become affordable, again, we have to engage the LGUs, the country is so big, we have islands, a lot of LGUs, we need to engage LGUs and help them and empower them to do all these tests.

Q: DOH also said that time not everyone supposedly tested yet because you had certain indicators?

SEN WIN: The first indicator there is, have you travelled abroad? And I know for a fact, for example in Valenzuela we had some initial patients there but the first question was have you travelled or not? If you haven't travelled abroad you will not be tested. Good enough this person tested negative but again right now because of the local transfers happening, I think it's not whether you have travelled or not travelled abroad, you need to get tested already.

There is already localized transmission and if we can contain that person, avoiding movement from that person would be the best case and we see that in Korea wherein they were testing everyone, people were lining up in the streets, lining up in their kiosk, they put up booth there, like a drive thru booth where people can be tested inside their cars. The message there is, if you are sick and you want be tested, go ahead and get tested and encourage people to get tested so that they can contain it on a person level, not on a local level or community level.

Q: Possible special session that might be conducted for the stimulus and the supplemental budget as part of the agenda, I don't think that would be difficult because most lawmakers will be in the country?

SEN WIN: Correct, I think no one will be travelling this time especially abroad because first of all we want to discourage the public from travelling abroad. I think I saw in the list a few of the patients there who contracted the Corona virus came from vacations, came from travelling abroad so if you can avoid travelling especially on non-essential reasons, avoid travelling, stay in the country and make sure you are available to government because the when you travel here inadvertently, you won't know whether you have contracted it in the plane or contracted outside, It's highly possible because the virus is spreading around rapidly in the different parts of the world.

Q: Now let's go to the second most important issue, I'm talking about the Philippine Offshore Gaming Operators (POGOs), the industry itself, there has been a lot of talk when it comes to the social cost of this particular industry the criminality that is attached to that operation, the President doesn't seem keen on closing down the sector itself but he wants to simply regulate it?

SEN WIN: Well this is a fact, POGOs brought crime to our country and this is well established in a lot of hearings and research conducted and you have to look at the nature of this business. Number one; it's illegal in China therefore the persons or the people who are operating this businesses will be the ones doing underground business such as syndicates. So, it's not far from POGO that syndicates operate this businesses and you can see that by looking at the data, with the rise of POGO are the rise of syndicates who are already here in as evidenced by the 700 fugitives operating in our country. Nakakatakot, instead of making our community safe, making our Barangays safe, people are now alarmed because of the syndicates operating here in the country. POGO is not a long-term business you can't have a business wherein the origin of your customers is saying this is illegal, you cannot also have a business where syndicates operate it. This is a short-term business and what's happening right now we are saying these businesses are here, some of our kababayans are employed in these businesses but this is not long-term most of their employees are Chinese, only 15% of the this POGO business are locals and were just giving locals false jobs security because this is not sustainable I don't see this business becoming long-term, I don't even see it surviving in the next ten or even twenty years. This is not like the BPO industry wherein they have been operating here for the last 14 years and growing and evolving into a higher tech industry but POGO because of the nature of this business, meaning, your main source of revenue is saying this is illegal and now, China is implementing stricter measures by cancelling passports of these businesses. So you can see the uncertainty that is surrounding this POGO business and if you have uncertainty, that cannot be long-term so point here is we don't want businesses that are not long-term, we want to have long-term sustainable businesses that will create jobs, that will create innovation and definitely make our country a safer place to live in. right now, it's not safe.

Q: Thinking of economic benefits of its operations, if we are to compare the experience of the Philippines with that of Cambodia basically the social cost is the same? But unlike the Philippines, Cambodia decided to close down their entire POGO industry, they don't call it POGO by the way, online gambling in Cambodia consistent with the position of the China but I think the key difference is that, when it comes to the Philippines, China is not exactly telling the Philippines to close down the industry but to crackdown the illegal industry. Some of the position of the government so far, we're getting the economic benefits?

SEN WIN: When you attract investments in the Philippines of course we want investments to come in our country. During the early stages of POGO in 2016, I had a different take on that because I looked at it as an investment, I looked at it as fresh money, fresh funds coming in the Philippines but from 2016 to 2019, we've seen that POGO is not what we are expecting, not as big and not as we are expecting because with the rise of POGO in our country, there were also rise in criminality, rise in corruption because you also see the Pastillas scheme happening in the Bureau if Immigration, we have to thank Senator Risa Hontiveros for bringing it up because it was really shocking to see the frontline people who should protect our borders are now allowing fugitives, these are criminals coming into our country. This is very alarming and then with the rise of POGO you also see tax evasion, we want companies here to pay the right taxes, the BPO industry is doing that, the multi-nationals are doing that, the manufacturing industry is doing that. They come here with the direction of we will help build the nation by paying the right taxes but sa POGO iba eh, when they came here, in fact, I have seen some documents, the first instance is, how can we circumvent the law, how can we get documents without talking to governments, hence we have now visas for sale, we have driver's license for sale, illegal driver's license for sale even illegal tin numbers for sale which is not the right way of conducting business in our country.

Q: AMLC, during the last hearing, NEDA disclosed, coming from the POGO industry, 7 billion?

SEN WIN: 7 billion, in fact you look at the entire POGO industry, the entire POGO industry is about 360 billion pesos but the 360 billion pesos is nowhere to be found because the only money that comes in to our country is 7 billion, so where is that 360 billion? everything is being done in the internet, it's very hard to track it and its very hard to assert accountability.

[end of recording]

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