Proposed POGO ban could lead to tax hikes, says Philippine senator

Senator Francis Escudero has argued that a ban on POGOs would hurt the economy.

The Philippines.- Senator Francis Escudero, leader of the Philippine Senate Committee on Finance, has argued that proposals to ban Philippine offshore gaming operators (POGOs) could lead to an income shortfall for the country, potentially requiring tax increases in other areas.

Philippine finance secretary Benjamin Diokno’s has proposed ending the POGO system, citing reputational risk and social costs. Senator Escudero acknowledged that there have been issues with certain POGO operators, but said not all of them should be penalised for the actions of a few.

He pointed out that the government has benefited financially from the presence of POGOs, with the Philippine Amusement and Gaming Corp (PAGCOR) reporting an increase in revenue directly attributed to the sector. The Bureau of Internal Revenue (BIR) has reported that POGOs generated PHP8.8bn (US$160.78m) in tax revenues in 2022, mainly due to enhanced tax compliance measures. 

Last year, the Senate’s Ways and Means Committee criticised PAGCOR for a lack of oversight in regulating POGOs. Senator Sherwin Gatchalian, in particular, has been vocal about the negative impact of POGOs. However, lobby groups with economic interests in the POGO sector have also raised concerns. The Association of Service Providers and POGOs argued that banning POGOs would result in 23,000 job losses for Filipinos. 

PAGCOR has initiated a review of POGO licensing, requiring all licensees and service providers to reapply for licenses by September 17. Escudero called the licensing review a “good start” but said Pagcor should “coordinate with law enforcement agencies so it knows what’s going on” if new licences are granted.

In July, PAGCOR introduced a new regulatory framework for offshore gaming licensees, raising the minimum capital requirement to PHP100m. The new licences will be valid for two years, and there is a PHP100,000 licence application fee.