If I paint stripes on a horse, will it make the horse a zebra?
You probably know where I’m going with this. No matter how much the apologists for this administration try to sanitize the dirty image of Philippine Offshore Gaming Operators (Pogo) by affiliating them with legitimate Business Process Management (BPM) organizations, they will never be one. They will still be the shady and unwanted entities that they really are.
Now for some hard facts.
As of 2019, the BPM industry directly employed 1.2 million people, virtually all of them Filipinos. (Nikhil Chandwani, “Philippines’ BPM Industry: 2019 and Beyond,” entrepreneur.com, Feb. 9, 2019)
The author of our excerpted article below says that if you count indirect employment, the number rises to nine million. Chances are you probably know someone who works for a BPM (your sons, daughters, nieces, nephews, etc.) or has a business that is linked to the industry. Think about the enormous impact this industry has on the Philippine economy, benefiting mostly the middle to lower classes through employment and business opportunity generation.
In contrast, by Philippine Amusement and Gaming Corp.’s (Pagcor) own admission, in 2020 Pogos employ around 120,000 people, of whom only 30,000 or so are Filipinos.” (“Pagcor: A Primer on the truth about Pogo,” news.mb.com.ph, May 3, 2020)
While you may not know a Filipino, who works for a Pogo, for sure you have heard of the many ills that are associated with it. And the impact to the economy? According to the Bangko Sentral ng Pilipinas, the exit of Pogos from the country will not have a material impact on growth.
That’s not where the comparison ends. IT-BPM, which flourished under the past administration (former Sen. Mar Roxas is unanimously credited with being “the father of BPM” in the country), teaches our workforce useful skills like IT, and even advanced knowledge like robotics and artificial intelligence. I have yet to hear anything useful that Pogo can teach Filipinos who are working for it.
So, in financial benefits and social costs, there is no comparison. No matter how Presidential spokesman Harry Roque paints this Pogo horse as a zebra, it will never become one, ever.
For those interested in real, honest-to-goodness comparison between BPM and Pogo, here is a useful read from a leading business luminary, who tells it like it is. The tax angle is especially telling. For those of you who are accountants, lawyers, or just plain well-informed, you will know of a tax concept called “permanent establishment.” Due to the illegal nature of the business in China, and the clever way they set up these entities, Pogos manage to avoid paying full taxes in this country, where their main economic activity is derived.
Few excerpts from his work (Note: The Philippine Economic Zone Authority (Peza) is the government agency that supervises most BPMs):
“The upside delivered by Peza is that they account for, and declare, everything because they are bound by governance and compliance. Unlike Pogos where we do not see the light of day on where all the bets and gambling revenues go, Peza’s export revenues all come in to the Philippines and are fed into our economy (about US$50 billion annually). Fees declared by service exporters are also verifiable using international transfer pricing rules.
Peza customers are known and traceable. The identity of Pogo players are kept in the dark. Unlike Pogos that provide employment but almost exclusively to Chinese nationals, Peza-registered enterprises provide employment to Filipinos and support Filipino families. (As mentioned in my earlier article, there are an estimated total of as much as nine million direct and indirect employees).
And you cannot compare the minimal investment put in by Pogo licensees in the Philippines compared to the capital inwardly infused by Peza manufacturers and BPMs (about $4 billion annually per Peza figures).
May I add that Peza companies upskill their people and are concerned with corporate culture. They have human capital policies that promote values, such as courtesy.
If we have the heart to help the Pogos and their Chinese personnel, can we justify feeling less for our legitimate investors and our own people?” (Alexander B. Cabrera, chairman of the Integrity Initiative Inc., a non-profit organization that promotes common ethical and acceptable integrity standards, and chairman and senior partner, Isla Lipana & Co. / PwC Philippines).