In recent years, the Philippine Offshore Gaming Operators (POGO) industry has flourished, bringing significant revenue to the Philippine economy. However, as the industry's links to various criminal activities have become increasingly apparent, the Philippine government has decided to completely shut down POGO operations.
This policy shift reflects considerations of social order and also shows the government's intent to balance economic development with social stability.
It is likely closely related to complex political factors in Philippine politics, especially the political entanglements between the Marcos and Duterte families, and how the Marcos government intends to adjust its power structure through this decision!
The Rise and Contributions of POGO
Since its inception in 2016 in the Philippines, POGO has primarily catered to overseas clients, especially the Chinese market.
The rapid development of the industry has brought hundreds of millions of dollars in tax revenue to the Philippines and created numerous job opportunities. According to statistics, the POGO industry once employed about 40,000 Filipinos and 23,000 foreigners.
In terms of taxes, according to data from the Philippine Amusement and Gaming Corporation (PAGCOR), in 2022, POGO paid 8.8 billion pesos in taxes to the Philippine Bureau of Internal Revenue, a 127% increase from the previous year's 3.91 billion pesos.
The total gaming revenue in 2023 doubled compared to 2022. In 2024, the total revenue of the Philippine gaming industry is expected to reach a record 350 billion pesos (about 6.03 billion USD)!
Moreover, the prosperity of POGO has also driven the development of real estate and the service industry, especially in major cities like Manila, where the demand for office space rentals has surged, benefiting the catering and transportation industries as well.
Compared to today, after the POGO ban, popular rental areas like shore are deserted, and many restaurants have closed down, showing the industry's impact on Philippine real estate!
The Shadow of Criminal Activities
However, as the POGO industry expanded, related criminal activities gradually surfaced.
Philippine President Ferdinand Marcos pointed out in his State of the Nation Address in July 2024 that POGO operations were involved in serious crimes such as financial fraud, money laundering, prostitution, human trafficking, kidnapping, torture, and murder. Besides these serious crimes, petty theft, robbery, and theft have also become more rampant.
Not to mention, the international notoriety of cases like the kidnapping and murder of two medical executives in the Philippines and the shooting of a small county official. To date, these cases have not been fully solved.
These issues not only threaten social order in the Philippines but also damage the country's international image.
Facing numerous problems brought by the POGO industry, the Philippine government took decisive measures. Ultimately, Marcos issued a ban in July, requiring the Philippine Amusement and Gaming Corporation (PAGCOR) to cease all POGO operations by the end of the year.
Marcos's decision not only combats transnational crime but also eliminates public criticism of government mismanagement.
Philippine society's disdain for the POGO industry has increased in recent years, especially as the public becomes more aware of the industry's links to illegal activities, leading to significant resentment towards Chinese nationals, including the current head of the immigration bureau who is anti-Chinese.
By shutting down POGO, Marcos can demonstrate his tough security policies while alleviating public concerns and enhancing the government's image among the people.
Deep Reasons Behind the Policy Shift, Political Entanglements
Apart from social security issues, internal political power struggles in the Philippines are also a necessary condition for the POGO ban!
Although Marcos became president, the Duterte family has continued to hold a significant position in Philippine politics, especially the influence of former President Duterte. Despite criticisms of excessive law enforcement and human rights violations during his drug war, his achievements in governance are recognized, maintaining his popularity among the public.
As a result, the conservative stance of the Duterte family and their tough policies on drug crimes contrast with the Marcos government's different stance on security and legal issues, leading to apparent grievances between the two.
Duterte's daughter, Sara Duterte, the current Vice President of the Philippines, strongly supported Marcos during the elections, forming a political alliance and ultimately winning the vice presidency.
However, in June, Sara suddenly announced her resignation from all positions except the vice presidency, which was seen as a rift in the alliance between the two families.
Soon after, Sara was exposed by the media for secret fund issues and even faced impeachment pressures. According to Philippine officials, they have gathered three pieces of evidence against Sara, ready for impeachment at any time!
During this period, Sara's frequent public disputes, accusations of "grave digging," and involvement in murder plots revealed her discord with Marcos, even claiming that Marcos lacked presidential capabilities and that she had evidence of his four major crimes.
However, despite the accusations, Sara's political actions and the underlying financial issues have always been hot topics in Philippine politics, with suspicions of corruption. Earlier, media reports revealed that most of the personnel involved in the secret funds were fabricated, indirectly accusing Sara of corruption. However, Sara has consistently neither denied nor defended herself, leaving her opponents helpless.
Marcos's push to shut down POGO is closely related to the conflicts between the two major families.
Firstly, the Duterte government's performance in combating telecommunications fraud and transnational gambling was not prominent, and Marcos's move can be seen as a way to enhance his political status by regulating social security. When Marcos announced the ban, there was immediate cheering and support from below, quickly winning over the hearts of officials.
Secondly, the complex relationship between the Duterte and Marcos families might require Marcos to further consolidate his relationship with the public through such policy stances. The public sees a president so firmly clearing illegal industries and regulating social security, which enhances their favorable view of him, boosting Marcos's support rate.
Furthermore, by cracking down on the gambling industry, Marcos can take the opportunity to eliminate some factors unfavorable to him, consolidating power much like Duterte did. So, a few months later, when the POGO issue quiets down, it's hard to say whether Marcos might introduce a new license!
After the Shutdown of POGO
The complete shutdown of the POGO industry will indeed have a certain impact on the Philippine economy. In the past few years, the POGO industry has brought substantial tax revenue to the Philippines, estimated at about 400 million USD annually. According to government estimates, this policy shift will lead to a loss of tax revenue, and related industry workers will also face unemployment issues.
Although the Marcos government repeatedly states that it will provide re-employment training for affected workers, the labor department has organized several recruitment events, but the number of participants and those ultimately employed are pitifully low.
Moreover, issues arising from the ban, such as the problem of mixed-race children between Chinese and Filipinos, the sluggish real estate market, and the contraction of the service industry, are also long-term problems.
Written at the End
The POGO ban has its pros and cons. Its emergence not only stems from the attitude within the Philippines but is also significantly influenced by the surrounding countries' aversion to the gambling industry. Especially China, the main customer base of the BC industry, where the Chinese government strongly opposes cross-border gambling. Moreover, the Chinese government is committed to lobbying in Southeast Asian countries, cracking down on more telecommunications fraud parks, and other crimes, exerting pressure on neighboring countries.
The implementation of any government order is not solely for the "people" but often involves more considerations by those in power.
The complete shutdown of POGO operations in the Philippines not only reflects the government's determination to maintain social order and combat criminal activities but also involves a balance of pros and cons.
The future of the Philippine POGO industry is uncertain, whether it will lead the e-games industry to new heights or there is hope for new licenses and regulated operations, remains to be seen.
