CNN THE SOURCE INTERVIEW OF SEN. WIN GATCHALIAN WITH RIA TRILLO ON POGO HEARING, SIM REGISTRATION AND OIL PRICE HIKE

Q: All right, let's get right to it. Now, the Chinese Embassy on Tuesday night clarified that it has not not placed the Philippines under the tourism blacklist due to POGO activities and I believe you were present during the meeting with Chinese ambassador Wang Jin Yan and senate president Migz Zubiri. Can you tell us what you remember about this part of the conversation?

SEN. WIN: Definitely it's a simple case of misinterpretation of the statements of the ambassador, but what's definite here is China through its laws, don't allow their citizens to gamble online, to invest in online businesses such as POGO, and also to work in online gaming businesses such as POGO. So these are very clear messages from the ambassador when we talked to them. In fact, the Ambassador repeatedly said that they would advise our country not to allow POGO operations here in our country because it also creates a lot of social problems such as crime and other things related to POGO. So they can also I think, what's through that conversation, what we gathered, is that they can employ blacklisting mechanisms to countries that have online gambling or POGO activities. And through our research through the internet, we found out that there are such moves from China to blacklist these countries and to not allow their citizens to go to countries to engage in online gambling. That's quite clear.

Q: All right, so it's also clear that the Philippines right now is not yet blacklisted. But what were to happen or how much tourism would be at stake if ever we did get on some kind of tourism blacklist.

SEN. WIN: So it's quite clear now that the country is not yet blacklisted, but that potential is there. That's very clear from the Chinese ambassador. What I understand from the Chinese ambassador is this blacklisting mechanism can happen because he also shared a story that some of their citizens committed suicide because there were so indebted with online gambling. And that's also becoming a social problem in China. So to address that problem, they want to prevent their citizens from going into countries who engage in online gambling which includes countries like the Philippines, Cambodia, Myanmar and other non ASEAN countries as well. This is to prevent their citizens from participating in online gambling, whether they are investing, whether they are gambling, betting or working in online gambling companies. So in terms of tourism, because if they do implement the blacklisting mechanism, 20% of our tourists come from China during the pandemic days, out of the eight million tourists that come to the Philippines, almost close to about 1.8 million come from China, and that contributes to about 140 billion pesos to our tourism revenue. So it's a significant amount. And if for example, China pursues blacklisting our country, that can definitely impact our tourism revenues.

Q: Right, Senator? Did they give a specific deadline as to when they might possibly impose the blacklisting and what factors or actions are they expecting from us in order to prevent this?

SEN. WIN: It's an open ended conversation, as regards to POGOs, there's no timetable. There's no specific action but definitely, they are contemplating on doing that. And we also have to remember that 50% of POGO revenues come from China. This is from the hearing yesterday, PAGCOR disclosed that the bulk of their revenue is almost 50%. That's a very significant amount that comes from China. So for example, if China will have a crackdown on POGO gambling, that will also affect the revenues being derived from China.

Q: So I know it's not a simple question to answer, Senator, but do we stand to gain more if we keep the POGOs and lose the Chinese tourists market, which according to the embassy is the second largest source of tourists, because it seems that we lose either way whether we keep the POGOs or we ban them. Can we say at this point, what scenario do we stand to gain more economically, not considering the social costs?

SEN. WIN: Well, I think the DFA and the tourism department should engage China in this respect. In regard to blacklisting we have to get more details. It's a topic that came out of our courtesy call. It wasn't a formal sit down meeting regarding tourism and regarding POGOs, it was just one of the topics that we discussed during the courtesy call, so it's important to get the details first. If China plans to blacklist us in the future, we have to get more details, but this is just an assumption. Tourism is a very big economic driver of our country as a whole and China is our neighbor, they are just a stone's away from the Philippines. And it's very convenient to attract Chinese tourists to our country as evidenced by the 1.8 million Chinese tourists that came during the pre-pandemic time. So if ever tourism will be affected, we stand to lose a lot because tourism is one of those economic drivers that has a trickle down effect on our countryside.

Q: Right now, you of course conducted the probes on POGO contributions to the economy. What have you discovered so far? I mean, has the promised revenue materialized? Or did they fail to meet the targets?

SEN. WIN: POGO pre-pandemic time and POGO now are vastly different. During the pre-pandemic time, we were earning, in terms of contribution to our economy, close to about 100 billion pesos. In terms of revenue coming to PAGCOR in particular, is close to about 30 million pesos during the heyday of POGOs but right now because of the pandemic, because of the crackdown in China, and because of the crimes happening here in the Philippines, they have created uncertainty to the POGO industry. It dwindled down to about seven billion pesos, both from PAGCOR and BIR. On top of that, the contribution to our economy is about 50 billion pesos. If you relate that to our GDP that's about close to about 1% of our GDP. It's definitely not as big compared to our overall economy but also not so small. What I can foresee in order to mitigate the effects of potential ban of POGOs is to lure our BPO industry and to increase the size of our BPO industry. We have to also remember that the BPO takes up a lot of our office spaces. So if they leave, the potential or the natural business that can take over those sites are the BPO industry and the BPO industry has proven a great employment contributor. It employs about 1.5 million Filipinos, so it's a good business to cultivate, to help replace a potential ban on POGOs.

Q: Yes Sir, I think one of your resource people spoke out about that and said that, you know, if we were to ban POGOs, you know, funds could be found elsewhere from perhaps other tourism markets and also for the country to invite more BPOs to come in the country and cover that gap should the POGOs be banned. What's your thoughts on that?

SEN. WIN: Yes, definitely. The BPO industry has been here for a very long time. It is a great employment generator. Again, it employs about 1.5 million Filipinos, and it contributes close to about $30 billion to our revenue. So that's an industry that has proven its track record and it's growing at an 8% clip per annum. So, again, if we harness the potential of BPOs, especially value added business process outsourcing, that can potentially replace the ban on POGOs. During the hearing, we also looked at other issues that are plaguing the POGO industry. For example, in the past, it was said that enforcement is the key to reduce or to eliminate crimes related to POGO. But we also found out that we're losing the war against crimes related to POGOs. Out of the 99 cases that were investigated by our PNP, by our police force, only one of those cases were actually convicted. So that's only one percent conviction rate. So if you gauge the wire against POGOs on the number of cases that we have convicted and the number of people that we have put in jail because of those crimes, it's only 1%. So in other words, these criminal syndicates are emboldened because they know that our conviction rates are very low and we're not putting these syndicates behind bars.

Q: Right, that being the case, Senator, what would your recommendation be to President Marcos and how quickly should the government decide on the fate of POGOs? As we said, it's not a simple matter, but what kind of tack would be the most cost-efficient? Is it outright deportation or cancellation of visas? That might make POGO workers just go underground?

SEN. WIN: Actually, I asked PAGCOR what is the future of POGOs and if there is a roadmap for POGOs. In any business, there's a roadmap, there's a future, there's a path to growth, and we asked PAGCOR that because PAGCOR is the sole gaming regulator in our country. And they've been in this POGO business for the last, almost seven years, or even more. And we asked them, what is the future of POGO? And they couldn't provide us with a roadmap. Just like any legitimate business, there's always a roadmap, you always know where you're going. But in this particular case, there is no roadmap. And the reason for that is because of uncertainty. China can one day say that okay, we'll blacklist every country that has POGOs and that creates an uncertain environment for this business. And we don't want to attract businesses that are uncertain and that are plagued with this type of policy changes externally. What we want is a sustainable business that creates trickle down employment. So that's also another angle that we have to look at because of external policy changes, the business of POGO becomes unstable and if it becomes unstable, the revenue generation becomes unstable, employment generation becomes unstable, the whole business model becomes unstable.

Q: Senator, welcome back to the program. Now let's continue our conversation regarding the POGOs. Now, the Association of Service Providers and POGO has said that some 23,000 workers might lose their jobs if we completely banned POGO. What's your response to that? And again how significant is POGO contribution to the Filipino workforce?

SEN. WIN: We also asked about the kind of work that these 23 million Filipinos are doing in POGOs. And the feedback is that a lot of them work in the technical aspect, for example IT, networking, computers. Some of them also work in marketing. So these are skilled personnel that worked in the service providers. So their skills will not be put to waste. I also know that they gained a lot of experience from working with POGOs. And again these 23,000 Filipinos or POGO workers can be absorbed by the BPOs because they also need the same set of skills in their companies.

Q: Again, if we were to ban POGOs logistically, how would we deport all the POGO workers? Because the DOJ previously said that it would actually be a challenge to deport thousands of POGO workers?

SEN. WIN: We have to transition out of POGOs. We also have to transition the 23,000 Filipinos working in POGOs because they also need time to get employment in other companies. So transition is important. We also have approximately 20,000 plus foreign national working in the POGO industry that should also be looked into because they will also need time to be able to leave the country, if they do want to leave the country. If they choose to stay and they're actually technically capable, then they would need to renew their permits and look for another job. So a transition phase is important. Considering that there are 34 POGO licensees and 100 plus service providers here in the Philippines, transition is important. I don't advise that it should be abrupt because there are a lot of employment considerations that we have to look into.

Q: Alright, so our transition period should be there. Now, Senator, let me ask you one last question regarding the POGOs. What would be the best alternative if there were no no POGOs? We talked about BPOs earlier, what replacement or substitute would you propose to offset the economic consequences of a possible POGO ban?

SEN. WIN: Well three things, so number one let's grow our BPO industry. I'm very optimistic with our BPO industry. I've met them a few times. They have a clear roadmap on where they want to be in the next 10 years. They project to grow at about 10% per annum. So it's important that we remove the roadblocks, the barriers for them to grow easily. We can increase employment there from 1.5 million to about two million on just the BPO industry alone. Number two is tourism. Tourism is a low hanging fruit that we need to tap and it has a trickle down effect all the way to the countryside. And that's why, again to juxtapose to what the Chinese embassy has said, it's important that we maintain our tourism lines with China open. We have to remember China is just an hour and a half away from us, from Hong Kong and three hours and a half away from Beijing. So it's a huge market that we can tap to grow our tourism. Number three, we have already adapted to so many liberalization laws; the Retail Liberalization Law, the Foreign Investment Act, the Public Services Act, all of which are designed to attract foreign investors, the right type of foreign investors. Foreign investors that will generate jobs that will bring hard capital investments in our country, and most importantly, investors who don't bring crimes or any crimes associated with those sectors. So we need industries that are crime-free in other words.

Q: Definitely. Okay, Senator, let's just shoot the top now to the SIM Registration Act. So we have this important tool now against tech scammers. How do we respond to concerns regarding the safety of data collection and storage of information now that people will have to give their personal information every time they purchase a SIM?

SEN. WIN: Well Ria, we have one of the strictest data privacy laws in the world. In fact, we're one of the few countries which have a sole commission dedicated to protect data privacy. We have the National Privacy Commission created by law and the aim of this commission is to come up with guidelines and standards that companies and organizations will use to protect our data. So this commission has only one purpose; to protect our data and to make sure that information is not passed around. So having said that, we have embedded laws that will protect our information in our data. I'm very confident because we have this commission to make sure that data collected by the PTEs and the telecommunication companies will be protected. On top of that, there are hefty fines in the prepaid SIM card registration, PTEs will be fined if there will be problems in terms of protecting our data. So those are also embedded in the law.

Q: All right now Senator may mga concerns din ang mga Filipinos abroad, o mga OFWs, some of them actually bring a Philippine SIM with them because they use it for roaming or Philippine transactions. What happens to them if they are not able to come home in time for the registration period?

SEN. WIN: Okay, what we envision as a process for registration is online. If you open an e-wallet account, either through G-cash or Paymaya or Shoppe, you don't go to the Shoppe office and register, you do it online. You talk to an online agent, you show your card, you participate by proving that you are the one applying for that e-wallet account. So what we are envisioning here is the registration process will be done through the internet. So there will probably be an online customer service and they will require your national ID, that will be the registration process. We don't envision that when you buy your prepaid SIM card you will fill up a form in the sari-sari store. Or if you're an OFW you have to come back and fill up a form, you can do that through the internet.

Q: Let's talk about the LEDAC meeting held earlier this week, among the priority bills set by President Bongbong Marcos which among these are the most crucial ones you think?

SEN. WIN: Well in my opinion in response to the pandemic, the health related bills are very important. For example, establishing the medical corps is very important. I think what we learned from the pandemic, if you have a pandemic that's widespread, there's no barangay or committee that is spared. So we need everyone on deck. And creating that medical corp is important so that we have feet on the ground in terms of responding to medical crises. And another very important response to the pandemic is the creation of the virology institute that will continue to research on the different types of viruses, continue to research on vaccines that will stop those viruses, that is also very important because we don't have such an institution here in our country. Another one is the Centers for Disease Control Bill that will create a US style CDC in our country. Again, in response to the pandemic, and that type of institution will be the institution that will respond to a pandemic-like occurence in our country.

Q: Alright now Senator, let's now go to oil price hike. There was another big time oil price hike this week, pretty much erasing any rollbacks from the few weeks before it. Are you renewing your call to institutionalize fuel subsidies?

SEN. WIN: Well, Ria as long as we import 99% of our fuel, we need to have a shock absorbing mechanism. And the most efficient shock absorbing mechanism in our country is the Pantawid Pasada. It's the only one we have. And if that is executed properly, in my opinion, that will be a very good shock absorbing mechanism for our PUV drivers and also our commuters. Since in the near future, I don't think we will be reducing our dependence to foreign oil. We need to institutionalize the Pantawid Pasada already to make sure that the database is always on time, to make sure that the mechanisms to distribute the aid is real-time, right now the aid distribution takes about two months. So by the time the drivers get their Pantawid Pasada fuel subsidy, fuel prices have already gone down. But the aim of this Pantawid Pasada is to help them buy fuel in cases of abrupt fuel spikes.

Q: Yeah, either way that assistance would be needed. Senator, how long do you think it will take for that bill to be passed? And also some transport groups are saying that, you know, with the recent fare hike and the assistance that has been given, it's just not enough.

SEN. WIN: Alright, so the problem is the uncertainty brought about by the grim incidents which is creating this high priced environment in our country. The reason for this is, OPEC has cut down two million barrels per day in terms of output. That's why we are seeing this spike here in our country. And that's why we have to be ready. The Pantawid Pasada should have a budget year in and year out. And we also have to calculate the historical fluctuations in terms of oil prices. Right now we allocate close to 2.5 to 3 billion per year, but in my opinion we have to raise that to five billion to about five to six billion a year because the price increases are so sharp and the increases are also quite high compared to previous occurrences. The previous occurrences will go up but it will take about five to six months, now in a matter of days prices can go up as high as P6 to P10 per liter.