Philippine President Rodrigo Duterte has been reluctant to close down Chinese-run online gaming sites and casinos. Image: Twitter/PhilStar

MANILA – As Philippine President Rodrigo Duterte moves to gradually ease an economically devastating Covid-19 lockdown, a government decision to allow Chinese-run online casinos to resume their operations has sparked a political uproar.

Philippine Offshore Gaming Operators, or POGOs, are largely run by Chinese citizens and are under growing scrutiny for allegedly serving as havens of vice and crime. POGOs also pay big concession fees to the government and in recent years have helped to drive fast economic growth in the capital Manila.  

The Inter-Agency Task Force on Emerging Infectious Diseases recently allowed POGOs to resume operations under new “stringent conditions,” including a cap on the number of employees that can work per shift and requirements that they must test negative for Covid-19 before being allowed on gaming floors.

Over the past two months, with the Philippines under coronavirus lockdown measures, essential industries such as food production factories as well as the economically crucial Business Process Outsourcing (BPO) industry have been allowed to operate under similar strict restrictions.

As such, Duterte’s government has effectively endorsed POGOs as an “essential” business, an implicit designation that has provoked a political firestorm considering the vast majority of Filipino-run businesses have been shut under months-long “enhanced community quarantine” measures.

There are signs, however, that anti-Beijing sentiments are gaining greater political force. Dozens of legislators, including top Duterte supporters, last week channeled that public outrage to table a new bill which aims to ban POGOs outright on the grounds they represent a “social menace.”

Leading senators from across the political spectrum have criticized the Duterte administration’s seeming favoritism for the Chinese-run gambling sites, which some have perceived as a sop to Beijing.

A Chinese-run gambling site run from the Philippines. Photo: Facebook

Led by House Minority Leader Bienvenido Abante Jr, the bill lashes out at online Chinese casinos as “source of unimaginable corruption.”

It says the operations “cannot be justified by the amount of revenue that may be derived therefrom, for such revenue no matter how big it may be, would be totally wiped out by the irreparable harm that results to individuals, families and society in general.”

Dubbed as the “Anti-POGO Act of 2020”, it also accuses the Chinese-run POGOS of making a “mockery of our anti-money laundering, immigration, and tax laws. It has been a source of untold criminal offences and heinous crimes related to the conduct of such operations.”

Earlier this month, Senate Minority Leader Franklin Drilon vowed to resume a so-called blue ribbon committee inquiry into the POGOs and their reopening during the ongoing coronavirus lockdown.

The veteran legislator has vowed to investigate the identities of those who “granted licenses” at the hearings, in order to expose allegations of corruption and illicit activities.  The opposition senator also accused Duterte’s government of pro-China favoritism, at one point lamenting aloud, “why do we love them so much?”

Chinese President Xi Jinping shows the way to Philippine President Rodrigo Duterte in a file photo. Photo: AFP

It’s a question many want Duterte to answer. Senate President Vicente Sotto III has openly questioned his administration’s effective designation of online Chinese casinos as an “essential” sector. “If the executive department has a good reason, that is their call,” Sotto said.

The Philippine BPO industry, meanwhile, has challenged Presidential spokesperson Harry Roque’s characterization of POGOs as “a kind of BPO.”

Rey Untal, Ibpap president and CEO of The Information Technology and Business Process Association of the Philippines (Ibpap), said the Chinese-run casinos were not part of his industry.

“[As] far as the IT-BPM (information technology-business process management) industry is concerned, Philippine offshore gaming operators, or POGOs, as they are commonly called, cannot be considered as business process outsourcing.”

“While BPOs and POGOs share one extraneous similarity, which is their offshoring nature, POGOs primarily do so because they are allegedly unable to practice their betting or gambling functions in their respective shores,” he said in a statement in early May.

There are also questions about how much economic benefit POGOs are providing. According to the Bureau of Internal Revenue (BIR), almost all of the Chinese-run POGOs are behind in their income and franchise tax payments, amounting to some 50 billion pesos (US$988 million).

Finance Secretary Carlos Dominguez has warned that “[i]n order for POGO service providers to be allowed to operate, they must pay their 2019 income tax liabilities.”

A punter places his bet in a Manila casino. Photo: Facebook

Moreover, the Anti-Money Laundering Council (AMLC) of the Philippines, an agency which tracks illicit financial activities, has claimed that the Chiense-run casinos may have engaged in at least P14 billion ($276 million) of “suspicious activities” including drug trafficking.

In recent weeks public sentiment has turned against China itself, well beyond the online Chinese casinos which are illegal back in the mainland and have even been criticized by Beijing.  

Amid the furor, the China Embassy in Manila released a video clip, tagged “Iisang Dagat”, which portrays Beijing as a benevolent neighbor and source of Covid-19 assistance.

The “Wow China” radio program, hosted by the state-run Philippine Broadcasting Service (PBS), has come under especially heavy fire in recent days for broadcasting the pro-China clip.

Netizens have accused the Philippine government of using taxpayers’ money to air Chinese propaganda over the national airwaves. The government has defended the program, which celebrates Chinese culture and history, as “light, informative an entertaining.”

Yet previous efforts to curb POGOs have been repeatedly resisted by the Beijing-leaning Duterte, who has been an avid supporter of the gaming dens often in defiance of his own agencies’ assessments and warnings.

“This [Chinese] POGO…it’s clean. It’s the game from the other side but it employs something like 20,000 in Metro Manila,” Duterte said in Tagalog, firmly standing by POGO operators just days before he placed the national capital under a Covid-19 lockdown.