Salceda: Banning POGOs will only drive them underground

Outlawing the Philippine offshore gaming operations (POGOs) will only do more harm than good as it would worsen the social costs associated with gambling, economist-lawmaker Albay 2nd District Representative Joey Salceda has said.

“If the government bans POGOs, it will just drive them underground and that would be worse. Gambling has been digitizing," Salceda said in statement.

"First it was e-sabong (electronic cockfighting), then e-bingo and e-casino. You can only stop gambling if you can stop digitalization. Can you stop the digitalization of gambling? Can you stop digitalization?” he added.

Salceda, the chairman of the House of Representatives’ committee on ways and means, said the better approach to POGOs was to regulate and tax them properly.

He also said the law should be enforced strictly to solve gambling-related crimes of kidnapping, extortion, and prostitution.

“We have one of the most brutal tax laws on POGOs in the whole world. In fact, we’re the only ones with a law on POGOs. You cannot stop gambling unless you stop digitalization," Salceda said.

"These digital games keep appearing again and again. The solution is to just regularize and regulate it basically…to have very strong regulatory powers,” he added.

“There should be a systematic approach, a physical way of addressing the problem with the combined action of the NBI (National Bureau of Investigation), PNP (Philippine National Police), and BID (Bureau of Immigration and Deportation),” Salceda said.

Salceda said POGOs provided tens of thousands of jobs to Filipinos as well as billions in revenues to government and other allied enterprises.

“If you ban POGOs, about 20,000 direct hires and around 70,000 more who are indirectly employed like waiters and drivers may lose their jobs,” Salceda said.

The lawmaker said that at the height of the POGO operations, the overall contribution of POGOs to the Philippine economy was P600 billion.

“Now it is about P128.5 billion in terms of aggregate demand, with P19 billion on annual office rent. There’s household rent, there’s electricity payment, yung kinakain P11 million, nandyan pa yung spending ng mga employees,” Salceda said.

Finance Secretary Benjamin Diokno said the country should do away with POGOs due to its “social cost.”

Senator Ronald "Bato" dela Rosa and Iloilo Representative Janette Garin also supported the call to ban POGO amid the controversies hounding the industry, including the series of abductions and other illegal activities.

The Department of Finance in September 2019 already threatened to shut down POGOs with tax liabilities, with uncollected withholding income taxes then estimated at P21.62 billion. A number of POGOs have since been closed.

The DOF in 2020 said government revenues from POGOs should reach as much as P20 billion per year, but collections only reached P6 billion in 2019.

The Bureau of Internal Revenue (BIR) then said "legal issues" hampered the collection of franchise taxes from POGOs, who claim they should not be subjected to such taxes as they are non-resident corporations.

For its part, the POGO industry—represented by the Accredited Service Providers Association of PAGCOR (ASPAP)—said its members paid the required regulatory fees and the corporate and withholding taxes of their workers. —NB, GMA News