Senator calls for investigation of PAGCOR agreement with POGO auditor

The audit firm hired by PAGCOR is under scrutiny.
The audit firm hired by PAGCOR is under scrutiny.

Senator Sherwin Gatchalian says the third-party auditor should be investigated by the Senate.

The Philippines.- Senator Sherwin Gatchalian has called for a senate investigation of PAGCOR’s agreement with Global ComRCI, the audit firm it hired to look at POGO finances, after it was revealed that it does not have a business permit.

Gatchalian called for a probe into the selection of the third-party auditor. A recent hearing of the Senate Ways and Means Committee found that Global ComRCI had been awarded the contract based on questionable bank certifications.

PAGCOR’s Consultancy Services for the Development, Operation, and Management of Intermediation Platform/Audit Program was awarded to Global ComRCI Consortium on October 26, 2017, for a 10-year term at a cost of over PHP552m per year. 

However, several issues have been brought to light, including Global ComRCI’s lack of operating capital and previous experience, as well as the consortium’s failure to register with the Philippine Securities and Exchange Commission. The bank certification submitted by Global ComRCI was found to be from an unregistered bank.

According to GMA Integrated News, Gatchalian expressed concern that the lack of technical capability of the third-party auditor may result in the underpayment of franchise fees and gaming taxes to PAGCOR and the Bureau of Internal Revenue. He also said the award of a contract worth almost PHP6bn over 10 years to an unknown entity raised serious concerns about government procurement and public expenditure.

Despite the concerns raised by Gatchalian, PAGCOR chairman and CEO Alejandro Tengco has stated that Global ComRCI complied with all bidding requirements. He said he did not see any irregularities in the contract.

Gatchalian has said he was working on a detailed report on the outlook of online gaming in The Philippines and that a ban on POGOs won’t affect the economy. He also reported that POGOs contribute PHP35bn in annual income taxes, however, in Q3 2022, the collection was only PHP7.2bn, estimated to be around PHP8.5bn by the end of December.

The Philippines registered 40 POGO-related crimes in 2022

Philippine authorities reported 40 crimes related to POGO in 2022. That’s down from 42 in 2021 but much higher than the nine cases reported in 2019. No cases were recorded in 2017 or 2018. 

According to Asia Gaming Brief, out of the 102 cases reported since 2019, only one resulted in a conviction. The incidents include reports of illegal detention, ransom, and kidnapping. Most of the victims were from China, followed by the Philippines, Thailand, Myanmar and others. A head of the police investigation unit said 299 victims have been rescued, while 16 were injured and one died. 

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