Press Release
June 29, 2020

Villanueva: Failure to follow PH laws, regulations triggered exodus of POGOs

The reported exodus of Philippine offshore gaming operators (POGO) due to tax issues just solidifies our position that POGOs have very little, if at all, economic contribution to the country, and especially with their unwillingness to pay the correct taxes, according to Senator Joel Villanueva.

At every instance when legislators called out POGOs for violating the country's laws, the government bent over backwards just to make them comply and yet these firms squandered all the opportunities given to them, pointed out Villanueva, the Senate labor committee chair.

"POGOs won't be a loss to the Philippine economy. We should attract companies that invest in Filipino people. Good riddance," Villanueva said in a statement. "The exiting POGO companies should still pay the taxes they owe us. Otherwise, we should blacklist them and name them publicly so that other countries will be warned about the behavior of these companies."

"Sobra-sobra na nga po ang pagkakataon na ibinigay sa mga POGO, ngunit kitang-kita naman po natin na winaldas lang nila ito. Hindi po natin dapat patuluyin sa ating bayan ang mga negosyong walang balak tumalima sa ating mga batas at panuntunan," he continued. "Hindi rin po sapat ang trabahong nilikha ng sektor na ito para sa ating mga kababayan."

As the state gaming regulator, the Philippine Amusement and Gaming Corp. (PAGCOR) should have been circumspect in drawing up a regulatory framework for the POGO sector, and proactive in ensuring all applicable laws are followed by all their licensees, according to Villanueva.

Villanueva's labor committee uncovered irregularities involving the influx of illegal foreign workers which eventually was tied to the rise of the POGO sector in the country. Despites calling the attention of various government agencies, violations of labor, immigration, and taxation laws by the sector continued. The rise of the sector has also been linked to rising criminality and prostitution, among others.

For instance, illegal POGO operations continued while the government enforced movement restrictions in mid-March due to the COVID-19 pandemic. From April to early June, authorities busted at least six underground POGO operations in various parts of Metro Manila, arresting hundreds of foreigners and confiscating equipment.

The Bureau of Internal Revenue (BIR) also disclosed to the Senate labor committee that POGO firms owe the government at least P50 billion in unpaid taxes in 2019. The bureau even crafted last month a set of guidelines for POGO firms to make payments and commit to settle past obligations just to be allowed to resume its operations.

On the other hand, the Department of Labor and Employment disclosed that over the course of its labor inspections in 2019, it discovered some 6,678 illegal foreign workers in PAGCOR-licensed POGO firms and POGO service providers.

"PAGCOR also admitted that there were about 100 to 120 illegal POGO firms operating in the country. They were never clear what they intended to do about it, despite their mandate of regulating the gaming industry," Villanueva said. "Meanwhile, they left their job to various government agencies who were left to fend for themselves."

Villanueva called on the government to ramp up its efforts to boost long-term public investments to attract new foreign direct investments in the country "which in turn will result in the creation of massive employment for our people."

"The Philippines remains to be open for business, and we welcome to our shores investors who are able to create jobs and livelihood for our people. At the same time, we want enterprises that are responsible and faithful to the laws of our land," he said. "The failure of POGOs to adhere to our laws resulted in their exit. This is what happened, plain and simple."

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