Finance Secretary Ralph Recto (Photo courtesy of DOF)
MANILA – Department of Finance (DOF) Secretary Ralph Recto on Tuesday gave assurance that the agency would help Filipino Philippine Offshore Gaming Operators (POGOs) find new employment.
This, after President Ferdinand R. Marcos Jr., in his third State of the Nation Address Monday, ordered the Philippine Amusement and Gaming Corp. (PAGCOR) to wind down and cease POGO operations by the end of the year.
“We have until the end of the year to ensure that all displaced Filipino workers will have new jobs and I think that is more than enough time. The DOF will work closely with the Department of Labor and Employment (DOLE) to ensure that the workers’ incomes will not be severely disrupted and that we provide them with proper reskilling and upskilling training for new employment,” Recto said in a statement.
Recto said he earlier submitted a cost-benefit analysis that recommended the prohibition of POGO operations due to reputational risks and social costs.
The DOF estimates showed that the net cost of POGO operations amounts to PHP99.52 billion annually while the estimated total economic benefits reach PHP166.49 billion per year.
The economic benefits took into account government revenues, such as tax revenues from the Bureau of Internal Revenue (BlR) as well as gross gaming revenues from PAGCOR.
Other estimated direct economic benefits include estimated income from office and residential space rentals, transportation, and the additional demand from the private consumption of employees and entities.
Recto however said that the estimated total economic costs amount to PHP265.74 billion annually.
The estimated economic costs include the undesired effects of reputational risks which have an impact on foreign direct investments.
According to DOF's cost-benefit analysis, the POGO-related crimes also bring negative impact in terms of the country’s attractiveness as a tourist destination.
Recto said POGOs also entail social costs, which include the loss of life as well as physical and psychological harm to victims of criminal activities.
Recto said he fully supports Marcos' directive to ban POGOs.
"As I have recommended to the President, POGOs come with significant reputational risks and we have seen the negative impacts and destruction they have caused to our country because of crimes. Banning them won't significantly affect the economy because the costs of keeping them far outweigh the benefits,” Recto said.
Social, reputational cost
National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan, for his part, also said banning POGOs will not have a significant impact on the economy.
"POGOs contributed less than one-half of one percent of our GDP (gross domestic product) as of 2022," Balisacan said during the Post-State of the Nation Address Discussions held at the Hilton Hotel in Pasay City.
"On the other hand we are likely losing from the presence of these POGOs because for example tourism, China has made it clear that cross-border tourism is likely to be regulated by them for countries that host these POGOs, that cater to them. If we take that into account the losses to our GDP is in the order of one percent so the benefits of banning POGOs outweigh the costs," he added.
Balisacan said the estimated losses already took into account the effect on the country's property market.
More than the economic numbers, he said the social cost and reputational cost of hosting these POGOs is very high.
"I think I would like to see, the President would like to see legitimate businesses, businesses that give (a) good reputation to the country as a good investment destination, tourists destination not one that encourage criminality," said Balisacan.
He is hopeful that the ban will also help improve Philippine-China relations.
"We hope that it would improve relationships so that business in the region, economy of our region will prosper even more because it's not only us that will benefit. China will benefit too from this move that we have made because they are against the presence of these," said Balisacan.
Foreign workers
Department of Social Welfare and Development (DSWD) Secretary Rex Gatchalian said not only Filipinos, but also foreign workers will be assisted by the agency.
“The non-Filipino citizens, normally, are victims of human trafficking and we have to work with their respective embassies, which we have done in certain cases, doon sa mga (in those) illegal POGOs to make sure that they are, first, provided [with assistance]. Kahit hindi sila mga Filipino, bulnerable at biktima rin sila (Even though they are nor Filipinos, they are also vulnerable and they are also victim),” Gatchalian said during the post-SONA Discussions on Environmental Protection and Disasters Reductoin in Pasay City.
He said the DSWD and the Department of Justice (DOJ) are running the Inter-Agency Council Against Trafficking - Tahanan ng Inyong Pag-asa (IACAT-TIP) Center, a multi-purpose building that houses victim-survivors of human trafficking.
“We house them there temporarily, work with their governments, so they can go home safely in the fastest possible time,” he said.
For the Filipino displaced workers, Gatchalian said the DSWD may provide cash aid under the Assistance to Individuals in Crisis Situation (AICS) program, as well as cash assistance to start their small business under the Sustainable Livelihood Program (SLP) to help them recover from the crisis.
“Kung gusto nilang pumasok sa (If they want to engage in) entrepreneurship, sa pagtatayo ng maliit na negosyo (in putting up a small business), then we can guide them and give them necessary grants,” he said.
Gatchalian said DSWD converted a former POGO hub into a shelter for families and individuals in street situations (FISS) who were reached out under the agency’s Oplan Pag-Abot Program.
“These are big facilities na mala-hotel (like a hotel). What we have to do is retrofit a little and put it to good use,” the DSWD chief said, referring to the former POGO building, a six-story building located along Williams Street in Pasay City.
The said building now has a child-friendly space, a medical clinic, and a processing area where social workers will be able to conduct intake procedures, profiling, interviews, and assessment of FISS.
A space is also provided for the registration of reached-out individuals to the Philippine Identification System (PhilSys).
“Yung mga FISS na pinupuntahan namin, na nire-reach out namin, doon na rin namin sila hina-house temporarily bago natin iuwi sa kanilang mga probinsya (The FISS that we reached out, we are housing them there temporarily before we send them to their respective provinces),” Gatchalian said.
He said the DSWD has indicated its desire to use other shutdown POGO hubs to convert it to more shelters for the reached-out individuals.
LGU’s compliance
Following the President’s pronouncement of a total ban on POGOs, Department of the Interior and Local Government (DILG) Secretary Benjamin Abalos Jr. said he has already directed local government units (LGUs) to scrutinize documents of establishments as the first line of defense in granting business permits.
The DILG chief said local officials who have reason to believe that a business is engaged in suspicious and illegal activities must coordinate with proper authorities.
“Nag-iikot na kami, we would make sure ay kailangan maayos yung mga mayor’s permit. Kaya nga nag meeting ako sa mga LGU, number one thing na dapat i-check ang mayor’s permit. Magbibigay sila nito and they can revoke it kung hindi sila magpapa inspect (We are going around, we would make sure that the process in getting a mayor’s permit is organized. I had a meeting with the LGUs, we said the number one thing that must be checked is mayor’s permit. The mayors can grant this and they can revoke it if an establishment will refuse inspections. Of course, we would also check the licenses on sanitation and engineering matters, and also the one coming from the BFP (Bureau of Fire Protection),” Abalos said in an interview with PTV-4 after the SONA on Monday.
Abalos said he is flying to the Visayas in the coming days to verify information on seven entities monitored by the Philippine Amusement and Gaming Corp. as allegedly linked to POGOs.
Abalos said business process and licensing offices (BPLOs) and village officials must also ensure that only those who do legitimate operations would be given business permits. (with Zaldy De Layola/Lloyd Caliwan/PNA)
