Chinese offshore gambling is supposed to be the goose that lays the golden eggs. But Filipinos are discovering that finding those eggs is easier said than done.
Philippine offshore gaming operators, or Pogos, have turned the country into a multibillion-peso gambling haven targeting Chinese citizens through casinos and online games. Chinese-backed firms that are largely based in Metro Manila and employ tens of thousands of Chinese workers, Pogos rocketed in number after President Rodrigo Duterte took office in 2016.
The problem is, the government does not know how many Pogo companies there are, how many people they employ, nor whether they are paying any taxes. And while economists and finance officials feel the Pogos should be paying more, government leaders cannot seem to agree on how to deal with the gambling firms.
In the past three years, Pogos have snapped up office space in Manila, paying premium prices, to the delight of real estate firms. Government, too, has benefited. A Philippine Star report said that next year the Philippine Amusement and Gaming Corporation (Pagcor) expects to collect 10 billion pesos (US$200 million) in licence fees from Pogos.
But the explosive growth of the gambling business seems to have caught the government unprepared: there are no fiscal, regulatory or immigration policies in place, and Duterte officials seem to be divided on these issues. For instance, this week in an opinion given to Pagcor and the Bureau of Internal Revenue (BIR), Solicitor General Jose Calida said that the gaming companies couldn’t be taxed by the Philippines because their income comes from abroad.
He was responding to moves by the Department of Finance and the National Economic and Development Authority to impose income as well as value-added taxes on Pogos. Finance secretary Carlos Dominguez said Pogos owed at least 21.62 billion pesos in taxes.