Revenue vs. Reputation: POGO Farewell

Despite the potential impact on annual revenue collections, Finance Secretary Benjamin Diokno expresses his desire to bid farewell to Philippine Offshore Gaming Operators (POGO), as he believes the country has faced increased reputational risks and incurred social costs due to their presence.

During the Kapihan sa Manila Bay briefing, Diokno states that it would be preferable to eliminate POGOs and explore alternative sources of revenue.

To provide context, POGOs contributed a total of P4.438 billion to the national government’s coffers during the first eight months of 2022, surpassing the P3.91 billion collected in 2021.

Previous administrations had sporadic relationships with POGOs, mainly involving individuals from China, considering gambling is prohibited in the world’s second-largest economy.

Despite generating guaranteed revenues for the Philippine government, POGOs have faced criticism for their alleged connections to money laundering and crime syndicates.

In March 2020, the Anti-Money Laundering Council expressed concerns about specific transactions associated with POGOs, suspecting possible ties to drug trafficking.

Furthermore, the presence of POGOs has also benefited the local real estate industry, with data from Colliers Philippines in 2022 showing that this sector occupied 5% of the country’s total leasable office spaces.

Diokno suggests that the presence of POGOs may have contributed to the Philippines remaining on the “gray list” of the Financial Action Task Force.

Government officials had initially hoped for the country’s removal from the money-laundering watchdog’s list by January 2024, but they missed the earlier deadline.

The Finance Secretary also emphasizes the social costs associated with POGOs, particularly concerns related to criminality. In 2022, some senators expressed criticism regarding the offshore casinos in the country due to the rise in kidnappings and the prevalence of illegal work permits.

Diokno raises questions about whether the Philippines is perceived as a weak state and why the presence of POGOs continues to be allowed.

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