FINANCE Secretary Ralph G. Recto has lauded President Ferdinand R. Marcos, Jr.’s decision to ban the operations of the Philippine Offshore Gaming Operators (POGOs) in the country effective July 22, 2024, and has committed to assist the displaced Filipino workers with safety nets to ensure that they can have replacement jobs as soon as possible.
“I fully support his directive to ban POGOS. As I have recommended to the President, POGOs come with significant reputational risks and we have seen the negative impacts and destruction they have caused to our country because of crimes. Banning them won’t significantly affect the economy because the costs of keeping them far outweigh the benefits,” the Finance Secretary said.
“We have until the end of the year to ensure that all displaced Filipino workers will have new jobs and I think that is more than enough time. The DOF will work closely with the Department of Labor and Employment (DOLE) to ensure that the workers’ incomes will not be severely disrupted and that we provide them with proper reskilling and upskilling training for new employment,” he added.
In his third State of the Nation Address (SONA) on July 22, 2024, President Marcos, Jr. ordered the Philippine Amusement and Gaming Corp. (PAGCOR) to wind down and cease the operation of POGOs by the end of the year.
The President’s decision came after Secretary Recto’s cost-benefit analysis report on June 25, 2024, which recommended the prohibition of POGO operations due to its social costs and reputational risks, which far outweigh the economic benefits of keeping them.
Estimates from the Department of Finance (DOF) showed that the net cost of POGO operations reached around PHP 99.52 billion annually.
The POGOs’ estimated total economic benefits only amounted to PHP 166.49 billion per year, significantly lower than the estimated total economic costs of PHP 265.74 billion annually.
The economic benefits took into account government revenues, such as tax revenues from the Bureau of Internal Revenue (BlR) as well as Gross Gaming Revenues from the PAGCOR.
Other estimated direct economic benefits include estimated income from office and residential space rentals, transportation, and the additional demand from the private consumption of employees and entities.
Indirect economic benefits were also taken into consideration, which comprised the associated economic activities as well as government revenues earned from POGOs’ multiplier effects.
On the other hand, the estimated economic costs of POGOs include the undesired effects of reputational risks which have an impact on foreign direct investments. POGO-related crimes also bring negative impact in terms of the country’s attractiveness as a tourist destination.
Apart from these, POGOs entail social costs, which are unquantifiable. This includes the loss of life as well as physical and psychological harm to victims of criminal activities.
POGO operations also affect communities by increasing fear and anxiety associated with illegal activities.
Additionally, the perception that groups engaged in illegal or criminal activities wield significant economic influence in certain areas erodes institutional integrity.
