Is the end of POGOs coming?

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    IF it’s one thing that President Duterte and Chinese President Xi Jinping publicly disagree about, it’s the continued proliferation of POGOs in the Philippines. It’s quite perplexing, considering that Mr. Duterte has acceded to most of Beijing’s demands on other matters, most notably on matters regarding the West Philippine Sea. Remember that President Xi himself asked for Mr. Duterte’s help in stopping the operation of online casinos here in Manila, as these POGOs service clients on the Chinese mainland. By having their physical operations here in the Philippines, these Chinese POGOs are, in effect, circumventing the prohibition against gambling in their home country.

    It would be understandable if Mr. Duterte refused to shut down these POGOs because of their contribution to the Philippine economy. It would be hard to turn down these businesses if they created thousands of jobs for locals, either directly or indirectly, resulting in viable economic activity. Lastly, it would indeed be difficult to turn down these businesses if they paid billions in revenue to the national government. But that is hardly the case with POGOs: instead of creating jobs for Filipinos, they employ thousands from the mainland. Instead of creating demand for auxiliary businesses like convenience stores and transportation, we have sex dens that traffic women from China and Vietnam, and fleets of white vans shuttling POGO employees. Even the Department of Finance is at a quandary about how to tax POGOs, citing a loss in billions of pesos from these entities.
    The housing requirement for the thousands of POGO employees has also caused a distortion in the rental market. Ordinary employees who work in Makati or Ortigas have complained of unaffordable rental rates due to competition from Chinese POGO businesses; even the side streets between Roxas Boulevard and Quirino are now occupied by POGO employees, down to the old houses. Local landlords are lured with one-year advanced payments, and there are lot owners who entered into long-term lease agreements with Chinese POGOs because the money is indeed good.

    But this period of plenty for a few might soon be coming to an end. China is reportedly in the process of cancelling the passports of nationals “suspected of engaging in long-term telecom fraud crimes abroad.” In short, Chinese nationals suspected of being employees in offshore gambling operations will have their passports revoked to prevent them from exiting the mainland. If China is indeed dead serious about this move, then it would effectively cripple the operations of POGOs here. Coupled with the temporary travel ban because of the coronavirus, Chinese POGO operators would have to move heaven and earth to get their employees to Manila – how long is a boat ride from China, anyway? Those living in areas with a high concentration of POGOs have noted a drop in the number of employees who frequent the POGO offices and its surrounding environs. One resident offered a theory: a good number of them must have gone home for the Chinese New Year, and were probably unable to go back because of the travel ban.

    It’s interesting to watch how the Duterte administration will react to China’s crackdown, knowing its inexplicable tolerance of POGOs in the country. Will it, like several instances before it, bend to China’s wishes? Or will it insist on its policy of tolerance, despite the fact that the presence of these POGOs does more harm than good? And perhaps the bigger question is: if it continues to tolerate the presence of these online gambling businesses in the Philippines despite the imbalance between benefits and clear disadvantages—why?