Senator Gatchalian claims POGO economic contribution not substantial

Philippine Senator Sherwin Gatchalian, a long-standing critic of offshore online gaming operators based in the country, has reiterated that the sector’s overall contribution to public finances is not substantial, quoting figures to support his statement.

As chairperson of the Senate Committee on Ways and Means, which oversees public revenue-raising matters, Gatchalian stated in a Thursday update on his website that Philippine Offshore Gaming Operators (POGOs) have been lobbying to create the impression that they generate substantial revenues, but this is not the case.

On July 22, Philippine President Ferdinand Marcos Jr. announced that POGOs, now known as Internet Gaming Licensees (IGLs), would need to cease their operations in the country by the end of the year.

Gatchalian reported that offshore online operators had remitted PHP10.32 billion to the government in 2023, based on actual revenue collection from the Bureau of Internal Revenue (BIR). In contrast, the Philippine Gaming and Amusement Corporation (PAGCOR), the country’s gambling regulator, generated PHP5.17 billion from the sector in the same year.

He also projected that the tax bureau’s collection from POGOs would reach PHP16.08 billion this year, while PAGCOR’s income from the industry was expected to be PHP5.95 billion, based on the average annual growth rate for the offshore online sector.

At a Senate hearing in late July, PAGCOR chairman Alejandro Tengco stated that the Philippine government could lose around PHP23 billion annually from licence fees and taxes on offshore operators, noting that 43 licensees were currently operational.

Catalino Alano, PAGCOR assistant vice president for external communications, mentioned that the financial impact of banning POGOs would be minimal, as the segment accounts for less than 5 percent of the aggregate gross gaming revenue. Despite this, Tengco suggested in an interview with ABS-CBN News that up to 14 business-to-business (B2B) services companies should be exempt from the ban. These BPOs provide services to offshore online operators but do not offer business-to-consumer services and employ more than 9,000 Filipinos.

Gatchalian’s Thursday website update indicated that 25,064 local workers were employed by the offshore online sector, based on data from PAGCOR provided by the Department of Labor and Employment. To ensure the ban on POGOs extends beyond President Ferdinand Marcos Jr.’s term, which ends in June 2028, the Senate Committee on Ways and Means is pursuing relevant legislation.

Gatchalian has also emphasized that local government units (LGUs) have a crucial role in monitoring the illegal activities of existing POGOs. It is important to keep a close watch on the last few months of this year on how the POGO ban will be implemented. This still does not affect licensed online gaming operations for the Philippine market.

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