POGOs face new Senate probe, disowned by BPO industry

By: Leila B. Salaverria, Melvin Gascon, Roy Stephen C. Canivel, Philippine Daily Inquirer, 3 May 2020

MANILA, Philippines — Senate Minority Leader Franklin Drilon on Saturday said he would move to resume the blue ribbon committee inquiry into the Philippine offshore gaming operators (POGO) as more questions were raised on the reopening of online gambling companies despite the national health emergency.

Drilon said that, among the things, he wanted to pinpoint, when sessions resume, the people behind POGO operations and “why do we love them so much.”

Senate President Vicente Sotto III said he wanted the administration to explain the reason for resuming Pogo operations and how much the government earned from them to be considered an “essential” industry allowed to operate during the enhanced community quarantine (ECQ).

“If the executive department has a good reason, that is their call. We have no say in that unless it is discussed in legislation [and] there is a senator or congressman who will push a bill saying we should remove Pogos forever,” Sotto said in a radio interview.

Drilon said he would “raise the propriety of resuming POGOs’ operations, including the identities of those granted licenses” at the committee hearings, which last focused on money laundering allegedly involving couriers who hand-carried cash linked to Pogos.

He questioned the classification of POGOs as business process outsourcing (BPO) companies, which were allowed to resume operations during the ECQ.

The claim that Pogos were BPOs was “insulting,” said Drilon, who pointed out that if that were the case, they should not have been regulated by the Philippine Amusement and Gaming Corp. (Pagcor), the state gaming and casino regulator.

BPO rejection

The Information Technology and Business Process Association of the Philippines (Ibpap) on Saturday rejected any similarity between online gambling and the outsourcing business.

Rey Untal, Ibpap president and CEO said that “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.

Pagcor and Malacañang on Friday announced that Pogos would be allowed under “stringent conditions,” including setting a 30-percent cap on the number of staff to work per shift and who must have tested negative for SARS-CoV-2, the virus that causes the severe respiratory disease COVID-19.

Presidential spokesperson Harry Roque on Saturday defended POGOs, saying they were “a kind of BPO,” which the Inter-Agency Task Force on Emerging Infectious Diseases (IATF-EID) had allowed to operate under both the ECQ and general community quarantine (GCQ).

The IATF-EID, which did not act on Pagcor’s request in March for a work-from-home scheme for POGOs, had not made public any resolution specifically allowing the resumption of Pogo operations.

Barbers: ‘Confusing’

Surigao del Norte Rep. Robert Ace Barbers, an ally of President Rodrigo Duterte, was dismayed that the IATF-EID took a “confusing” position on Pogos.

He said that under Category 4 of IATF-EID Resolution No. 30 on April 30, gambling and betting were disallowed under both ECQ or GCQ.

Barbers expressed concern that the IATF-EID was showing favoritism for the Pogo industry and their workers to the detriment of Filipinos who had been shut out of their workplaces due to the lockdown.

“If government is allowing POGO workers to return to work either under ECQ or GCQ, then it should also allow the millions of daily wage earners,” he said.

But Roque said there was “no favoritism there.”

Equal protection clause

“On the contrary, the equal protection clause provides that all those similarly situated must be treated alike,” Roque said at the Laging Handa briefing on Saturday.

Speaker Alan Peter Cayetano, who said he opposed Pogos on moral grounds, also earlier said that giving the green light to Pogo reopening indicated favoritism for the gaming business.

Drilon wanted the identities of licensed Pogos disclosed to the public. “Why do we love them so much?” he asked in a radio interview. “It seems like they are being favored and we are willing to risk everything just so we can have Pogos operate.”

House Deputy Minority Leader and Bayan Muna Rep. Carlos Isagani Zarate raised a similar issue.

“Are the political backers of Pogos so strong that they can even skirt COVID-19 pandemic regulations?” he said.

“Gambling is not a basic service and is, in fact, an antisocial activity that corrupts the moral fiber of our country. So, was there a very strong pressure to reopen them that the IATF acceded to their request?” Zarate asked.

Several lawmakers had warned that reopening Pogo companies could pose a health risk as the country was still battling the spread of the contagion.

Sen. Sonny Angara, a COVID-19 survivor, told the Inquirer on Friday, that the dormitory-type quarters of Pogo workers were the same as the impoverished residential areas in Singapore where most of the COVID-19 infections were reported.

Difference is clear

The justification for allowing the resumption of Pogo operations could blur the lines between online gaming and BPO companies.

But for Untal the differences are clear. BPOs operate in the country to utilize local talent, giving direct and indirect jobs to millions of Filipinos. Pogos, on the other hand, largely hire foreigners, he said.

“BPOs come to the Philippines to leverage off our human capital, i.e. our strong English and technical skills, customer service orientation, ‘malasakit,’ and ability to adapt to foreign cultures,” he said.

“This, in turn, has directly benefited millions of Filipinos by providing them with better employment opportunities throughout the years,” he added.

As of 2019, the IT-BPM industry has employed 1.3 million direct workers. That figure would swell with the indirect jobs created in related industries to support BPO operations.

In comparison, Pagcor data in March showed POGOs employing 120,976 workers, with nearly 70,000 Chinese, and only over 30,500 Filipinos.

The IT-BPM industry is considered the largest employer in the private sector, giving good-paying jobs to Filipinos so that they need not leave to work abroad.

Although its revenue prospects had lowered mainly because the Duterte administration wanted to rationalize tax incentives, the industry still generated a revenue of $26.3 billion for the government last year.

If Pogos were like BPOs, why were they not allowed to operate since the early days of the lockdown? Under current rules, POGOs are not formally considered as BPOs.

‘Must be a duck’

Drilon pointed out that BPOs are licensed by the Philippine Economic Zone Authority (Peza) or the Board of Investments (BOI), but Pogos are licensed by Pagcor.

Since Pagcor supervises POGOs, it is clear that they are gambling operations, he said.

“As they say, if the POGOs look like a duck, swim like a duck, quack like a duck, it must be a duck,” Drilon said.

Secretary Ramon Lopez of the Department of Trade and Industry, who chairs both Peza and the BOI, said Pogos were online gaming companies.

He refused to answer when asked whether he considered them BPOs, too.

“There are similarities with BPOs in terms of the use of IT and online platform in their business models, not brick and mortar, no physical interaction with clients and customers. So they could impose the required minimum health protocol standard,” Lopez added.