Senators Criticize Government-Owned Gaming Corporation’s Handling of Offshore Gaming Operators

MANILA, Philippines (January 23, 2023) — According to a local media report newly installed officials of the Philippine Amusement and Gaming Corporation (PAGCOR) were criticized by senators on Monday on how they oversee the operations of Philippine Offshore Gaming Operators (POGO).

ABS-CBN News reported the hearing centered on the government’s revenue interest and the “social cost” of POGO operations in the country.

Senator Sherwin Gatchalian, chairman of the Senate ways and means committee, grilled PAGCOR over its contracted third-party auditor which, according to his research, has questionable documents.

The hearing opened up with Senator Gatchalian asking for PAGCOR’s update about the status of a kidnapping of a Filipina last year, allegedly involving employees of Brickhartz Technology, Incorporated and MOA Cloudzone Corporation – service providers of an unnamed POGO company.

The victim was only released when a relative paid her P250,000 ransom.

Senator Gatchalian failed to hide his disappointment upon learning that PAGCOR only fined Brickhartz a half-a-million pesos, while Cloudzone has yet to be investigated by the agency on the said kidnapping incident.

I think you’re treating criminals, those connected to crimes with leniency. You’re not strict with them because on one hand you are collecting revenues from them, and on one hand, you’re regulating them. But obviously, your regulation is slow and it’s also not substantial,” Gatchalian retaliated.

“That’s the very reason why the former head was sidelined and eventually resigned,” PAGCOR’s Vice President for Legal Group, Roderick Consolacion admitted.

For Senator Ronald dela Rosa, however, it’s time for PAGCOR to show its might.

“It’s about time that we assert our supremacy over them. We are supreme here.” Dela Rosa, the chairperson of the Senate public order and dangerous drugs committee, said.

“Rest assured our administrative penalties can range from penalties up to the cancellation of their accreditation,” Fernandez replied.

PAGCOR’S THIRD-PARTY AUDITOR

Three company names meanwhile turned up as PAGCOR’s contracted third-party auditor with the contract taking effect in the year 2017, amounting to P6 billion.

But Global ComRCI has a lot of documentary issues, while its service providers Global Myoho Renge Copy, Inc., Comfac Corporation, and Highweb Trade registered their capital which is below the minimum required by the law.

Soleil Chartered Bank, which certified that Global ComRCI has a $25M fund, is not registered at the Bangko Sentral ng Pilipinas.

“Soleil Chartered Bank is not a registered bank with the BSP and it’s not allowed to operate in the Philippines… only a bank registered with the BSP or a bank licensed with BSP is authorized to issue letters of credit,” Director Florabelle Santos-Madrid of the BSP Financial System Integrity Department, said.

Documents presented by Gatchalian during the hearing also stated that the registered office address of Global ComRCI in Parañaque City is a residential area.

A former Global ComRCI worker reportedly told city hall employees that their office was already closed, the document said.

The Manila City Hall meantime certified that Global ComRCI, Inc., has no business permit.

While Securities and Exchange Commission records stated that only Global ComRCI, Inc. is registered with their office.

Consolacion meanwhile explained to the panel that their agency cannot just junk the application of any company.

But he assured the committee that PAGCOR will act accordingly.

“Perhaps we can go into the record and ask their comment on this. And maybe we can recommend that this contract be terminated. This is really a spurious document,” Consolocaion stressed.

ASSESSMENTS

Interviewed after the hearing, Senator Gatchalian raised the possibility that PAGCOR is working in cahoots with POGOs, or with a third-party auditor.

“Ang assessment ko, in short nabudol ang PAGCOR… malaking tsansa ang POGO naga-under declare (ng income). Hindi tama yung dine-declare sa atin. Yung gross gaining revenue ng third-party auditor hindi accurate. So mas malamang na mas malaki ang kinikita ng POGO kaysa sa binabayad sa atin,” Gatchalian said.

“Ang nabayaran lang ng gobyerno on the average is about P150 a year, pero utang yan ng gobyerno, so even though hindi nagbabayad ng cash collectible yan ng third party auditor, utang natin yan no as government, as taxpayers. So yung P500 million in my opinion is not worth the penny because hindi sila technically capable at wala silang maipakitang technical capabilities,” he added.

He also expressed doubts that the lapses that they’ve seen in the panel were unintentional.

“Hindi ako naniniwalang unconscious mistake yun o unwitting mistake, ang laki-laki ng PAGCOR, marami silang abogado, maraming technical people so di ako naniniwala na its an unconscious mistake o di nila nakita yan. I think we need to go deeper into the bidding proper itself no, and that will be triggered through a Blue Ribbon investigation,” Gatchalian stressed.

During the hearing, Senator JV Ejercito called on the panel to be considerate to some 40,000 POGO workers who will be affected by any drastic action of Congress.

Aside from the job issue, the real estate sector he said will be also severely affected by the sudden POGO exit in the country.

Ejercito said there should be a clear plan on how the country could handle a situation without a POGO operating in the country.

“I’m just worried about the termination of this business. Also the employment,” Ejercito said.

Gatchalian, however, junked such apprehension, stressing that there are other sectors that could bounce back and support the economy once POGOs are out of the Philippines.

“In a nutshell without disclosing so much, kasi ang committee report will spell that out. In a nutshell, kapag umalis ang POGO sa atin, hindi babagsak ang ekonomiya natin, matibay na matibay pa rin. Magkakaroon lang ng konting aasikasuhin sa 16,000 na Filipinos working in POGOs but I believe kaya natin sila bigyan ng trabaho. Ang ekonomiya natin hindi babagsak dahil mawawala ang POGO,” Gatchalian said.

“In fact better ito sa real estate dahil nung andito ang POGO, it created a bubble. Tumaas ang presyo ng renta sa bahay, tumaas ang renta ng presyo sa condominiums, pati office. So bumaba nung pandemic to the right level. So naging artificial bubble siya. So I’ m not gonna worry about real estate,” he added.

“On the other side, yung maliliit na negosyante, marami ako nakausap na maliliit na negosyante na nawalan ng office space because tumaas ang offers. So makakabalik na sila especially in areas like Makati, Ortigas itong Manila Bay area. So meron ding magandang dulot ang pag-aalis ng POGO because local businesses now come in at the right price level,” Gatchalian said.

Gatchalian said he is now conferring with Dela Rosa on the content of their joint committee report.

By: Sherrie Ann Torres.

SOURCE: ABS-CBN News