Senate to summon officials tagged in ‘pastillas’ scheme


    THE Senate will proceed with its investigation into the alleged illegal activities related to the operations of Philippine Offshore Gaming Operators (POGO) outlets in the country despite the relief of 83 immigration officials supposedly involved in the “pastillas” scheme at the Ninoy Aquino International Airport (NAIA).

    Sen. Risa Hontiveros, chairwoman of the Senate committee on women, children, family relations, and gender equality, told dzBB in an interview that she will summon former and active immigrations officers reportedly working in cahoots with owners of travel agencies for the non-fuss entry of Chinese fugitives, casino high-rollers and tourists for a fee.

    Among others, Hontiveros said she will send an invitation to former Bureau of Immigration (BI) deputy commissioner Red Marinas, who has been tagged by a whistleblower as the alleged main man in the pastillas conspiracy.

    Also to be invited in the next hearing are BI officials Bien Guevarra, Glenn Comia, and Den Bisol, all former BI Travel Control Enforcement Unit chiefs; and personnel Totoy Magbuhos, Deon Albao, Paul Borja, Anthony Lopez, and Dennis Robles, who were all tagged by Senate witness Allison Chiong, an Immigration Officer 1 assigned to one of the NAIA terminals, as among those involved in the modus.

    “Magtatawag kami ng at least isa pang hearing kung saan iimbitahan ko ‘yung isa sa mga dating BI official na pinangalanan ng aming whistleblower na si Alex Chiong, si dating deputy commissioner Red Marinas, para magdagdag sana ng kaliwanagan sa mga isyung ito para once and for all ay matigil na (I will call for at least one more hearing where we will invite former BI officials led by Red Marinas who was tagged by our whistleblower Alex Chiong),” Hontiveros said.

    Chiong testified before Hontiveros’ committee last week and confirmed the senator’s earlier exposé that immigration agents have been collecting at least P10,000 each from Chinese tourists who want fast processing of their upon arrival visas.

    Aside from the tourists, Chiong had also claimed that they likewise facilitated VVIP (Very Very Important Person) visa processing for Chinese casino high-rollers and hassle-free entry of fugitives in exchange for payments ranging from P50,000 to P200,000 each.
    Police records show 733 fugitives from China have entered the country.

    Chiong’s testimony backed Hontiveros’ disclosure of the modus operandi, which supposedly employed at least 90 percent of airport personnel. The grease money was reportedly wrapped in a white bond paper, similar to the wrapper of the local delicacy milk-based pastillas.

    Hours after Chiong’s testimony last Thursday, President Duterte announced he had relieved 83 immigration personnel for their supposed involvement in the pastillas scheme and other corrupt activities at the BI.

    The BI had also created a fact-finding body to conduct an internal probe into the issue, while Justice Secretary Menardo Guevarra ordered the National Bureau of Investigation to include the pastillas disclosure in its ongoing probe into BI anomalies.


    Sen. Sherwin Gatchalian, Senate economic affairs committee vice chair, citing supposed research data, claimed POGO operations have been cheating the country in taxes.

    Out of the 60 POGO licenses granted by the Philippine Amusement and Gaming Corporation (Pagcor), only 11 are Philippine-registered, reason why the rest do not pay taxes.

    Gatchalian insisted government should collect the P52 billion in unpaid taxes from the unregistered POGOs.

    “Regardless naman kung anong nationality nila. Ang punto rito ay ang POGOs hindi nagbabayad ng tamang taxes sa ating bansa. Ang nawawala sa atin ay close to P51 billion every year in terms of taxes (The point here is that POGOs do not pay the right taxes regardless of their nationality. The country loses close to P51 billion a year in terms of taxes),” he said.

    Gatchalian rejected the alibi that they do not pay taxes because their main gambling operations are outside of the Philippines and that POGOs in the country only have information technology (IT) providers.

    “Yan ang pinakamalaki. In fact, kapag in-estimate namin, kapag sinama mo ang kita sa sugal, ang nawawala sa atin ay close to P181 billion dahil ang claim ng POGOs ay hindi rito nangyayari ang pagsusugal, ang claim nila ang pagsusugal ay nangyayari sa ibang bansa (That’s the biggest chunk of loss. In fact, based on our estimates, if we compute taxes on gambling operations, we lose close to P181 billion because these POGOs claim that the actual gambling happens outside of the country and not here in the Philippines),” Gatchalian said.

    Aside from being tax cheats, Gatchalian said POGO operations also paved the way for the smooth entry of foreign criminals to the country, especially those from China.

    He said the increase in POGOs was also the reason why crime figures have gone up, especially in Makati City where a great number of POGOs are based.

    Police records show that there have been 14 kidnapping incidents recorded in Makati City alone since POGOs started operations in 2016. He said nine prostitution dens were also raided which led to the arrest of 191 foreigners, and 56 incidents of assault, robberies, and crimes against property have been recorded in the city.


    The Chinese government yesterday said it now has a list of its nationals working in telecommunications fraud and working in POGO outlets in the Philippines as part of its effort to crackdown on crimes involving its citizens abroad.

    “In order to crackdown on cross-border telecommunications fraud crimes, the Ministry of Public Security has obtained a list of Chinese nationals suspected of committing long term telecommunications fraud crimes abroad, who are classified as the persons prohibited from exiting China according to the Exit-Entry Administrative Law of the People’s Republic of China,” the embassy said in a statement.

    “Such operations are aimed at the suspects of Chinese nationals who have committed telecommunications fraud crimes in different countries,” it added.

    The embassy said it has always required its nationals overseas to abide by local laws and regulations.

    “The Chinese Embassy in the Philippines has repeatedly issued consular reminders and has been keeping close communications with the Philippine government in this regard. The relevant departments of both countries also conducted a series of law enforcement operations,” it said.


    Anti-Crime and Terrorism Community Involvement and Support (ACT-CIS) party-list Rep. Eric Yap, chairman of the House committee on games and amusement, said POGOs cannot be exempted from paying withholding tax which ordinary Filipino workers pay.

    Yap said a law imposing withholding taxes on the operators’ employees should be immediately enacted by Congress, pointing out that POGOs only pay for license fees which is only at least P6 billion.

    “They (POGOs) only pay a license fee to PAGCOR which is worth P6 billion a year. It doesn’t include their Value-Added Tax (VAT) because if they are offshore operators, they don’t pay VAT here,” Yap told radio dzBB.

    The lawmaker said withholding tax, however, should be paid by POGO companies for their employees.

    Last November, the House committee on ways and means approved a bill which seeks to impose taxes on POGOs and its Chinese workers in the country.

    The panel chaired by Albay Rep. Joey Salceda approved House Bill No. 5267 imposing a five percent franchise tax on POGOs and 25 percent income tax on the salaries of foreign employees with a minimum threshold of P600,000 annually.

    These additional taxes would allow the government to collected P20 billion from the franchise tax.

    The panel bucked the position of the Office of the Solicitor General (OSG) that POGOs are not subject to Philippine taxes because its income is from activities undertaken abroad.

    Yap said that when POGOs operated in the Cagayan Economic Zone Authority (CEZA) in 2014, the license fee they paid was less than P1 billion and their employees were not required to pay withholding tax.

    “Just imagine, if they pay just P5,000 withholding tax per employee and they have 100,000 to 300,000 employees, every month, how much is that? It’s going to be a huge amount for the government,” he said.

    The taxes collected from POGOs and their service providers jumped by 169 percent in 2019, following the government’s campaign against errant POGO firms.

    The Department of Finance (DOF) said the government was able to generate P6.42 billion in taxes from the industry last year, P4.04 billion higher than the P2.38 billion generated from these businesses the previous year.

    According to the DOF, the Bureau of Internal Revenue (BIR) collected P5.13 billion in withholding taxes, P644.07 million in income taxes, P91.13 million in value-added taxes and percentage taxes, P81.11 million in documentary stamp taxes and P469.13 million in other taxes from POGOs. – With Wendell Vigilia and Ashzel Hachero