Philippines: POGO Shutdowns, Deportations of Chinese Workers

The Philippines government is determined to deliver on its plans to address organized crime related to the POGO industry and will shut down 175 offshore gambling firms, a justice ministry official said on Monday.

Deportations to Begin Next Month

Jose Dominic Clavano, a justice ministry spokesperson, said that the crackdown on the Philippines online gambling industry “was triggered by reports of murder, kidnapping and other crimes committed by Chinese nationals against fellow Chinese nationals,” reported Reuters.

Besides shutting down offshore operations, the government would be deporting about 40,000 Chinese workers employed with the firms that are facing the axe: targeted for closure are POGOs with expired or revoked licenses for non-paying government fees, added Clavano, outlining that the deportation of the Chinese workers will commence next month.

The news of the crackdown and deportations resonated well with the Chinese embassy in Manila which expressed in a statement the Chinese government’s support for the actions against POGO-related crimes as it “firmly opposes and takes tough measures [itself] to combat gambling.”

The POGO industry boomed after 2016 when offshore operators benefited from the ban on gambling in China and targeted Chinese players, hiring Chinese nationals to facilitate the process. At its peak, the industry employed more than 300,000 Chinese nationals but due to the pandemic-related restrictions and higher taxes, some of the operators were forced to switch their focus elsewhere.

Wider Economic Impact

Official data from the finance ministry reveals that the POGO industry was a significant contributor to the Philippines government, generating PHP7.2 billion ($121.97 million) in 2020 and PHP3.9 billion ($66.06 million) in 2021 in operating fees alone but according to estimates, contributions in terms of taxes, wages and property rentals are considerably larger.

According to estimates provided by a real estate consultancy cited by the media, the sector employs 201,000 Chinese and 111,000 Filipinos and is impacting the economy by PHP190 billion ($3.22 billion).

Further, if the POGO sector is pulled the plug entirely, the consultancy estimates that the country would lose PHP 8.9 billion ($150.77 million) in annual rent as it would vacate 1.05 million square meters of office space.

These estimates could be worrying for all stakeholders and property owners as a recent bill introduced by Senator Joel Villanueva would be seeking to pull the plug on the entire POGO industry by implementing a ban on online gaming.

According to the latest data from the Philippines regulator, the number of POGO operators in the country decreased from 60 before the pandemic to 30 now.