Philippines collects P356 million from POGOs, as China condemns gambling

Ralf Rivas
Philippines collects P356 million from POGOs, as China condemns gambling
The Chinese government wants gambling operators punished, but the Philippines wants to get more taxes from them

MANILA, Philippines – The Chinese government issued a strongly-worded statement that enumerated the many problems it has encountered with online gambling, but this is an industry that has proved to be a good source of revenue for the Philippines.

From money laundering and extortion to kidnapping and slavery, China made it clear that it is clamping down on the industry.

“The Chinese side hopes and urges relevant departments of the Philippine government to pay more attention to China position and concerns and take concrete and effective measures to prevent and punish the Philippine casinos, POGOs (Philippine Offshore Gaming Operators), and other forms of gambling entities for their illegal employment of Chinese citizens,” the Chinese embassy said.

This was in response to the proposal of the Philippine Amusement and Gaming Corporation (Pagcor) for a dedicated hub for POGOs.

However, the Philippine government – a friend of China’s – made it clear that gambling is perfectly legal here. In fact, it wants to tax the industry more efficiently.

On the same day China voiced its concern, the Bureau of Internal Revenue (BIR) reported that it has collected an initial P186 million in withholding taxes from POGOs and is getting another P170 million this month in tax payments from these businesses employing foreigners, for a total of P356 million.

Finance Assistant Secretary Dakila Napao said BIR data showed that of the 48 notices sent to POGOs, 22 have either replied or protested the tax assessments. 

Meanwhile, BIR Commissioner Caesar Dulay said that for the initial year of operations of POGO service providers in 2017, the BIR collected only P175 million in taxes.

POGO service providers remitted over P579 million in taxes in 2018 and voluntarily paid P789 million in the 1st half of 2019. The government said POGOs need to pay over P4 billion in unpaid taxes.

The government even formed an inter-agency task force to create a database and ensure that foreign workers of POGOs and other industries have a tax identification number.

Finance Secretary Carlos Dominguez III previously said that the task force and the Chinese government are not talking and that the effort was purely for taxing foreigners better.

POGOs are regulated by Pagcor, whose gaming revenues soared to P68 billion in 2018.

The real estate industry has also enjoyed Chinese money, as POGOs push prices up. (READ: Online gambling: Good for whose business?)

It’s clear that the Philippines has gained much from online gambling – and even more cash is coming.

But just a statement from China is not enough, according to Malacañang. If there are abuses, complaints should be filed against employers.

“If we see any violation of human rights, whether against foreigners or against our countrymen, we will respond,” said President Rodrigo Duterte’s spokesman Salvador Panelo. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.