Gatchalian cites conflict of interest, lapses in PAGCOR's POGO regulation

ABS-CBN News

Posted at Jan 24 2023 12:30 PM | Updated as of Jan 24 2023 01:34 PM

MANILA - The Philippine Amusement and Gaming Corp has failed to do due diligence in handling Philippine Offshore Gaming Operations (POGO) and there is a "glaring conflict of interest" in the regulation of the sector, a lawmaker said on Tuesday. 

PAGCOR employed a questionable third-party auditor who appears to be undercapitalized and backed by a bank that is not registered under the Bangko Sentral ng Pilipinas, Senator Win Gatchalian told ANC's Rundown.

The Senate Ways and Means Committee is conducting a hearing on POGOs related to the abduction of a Filipina last year. 

During the hearings, Gatchalian, who chairs the committee, said they have unveiled violations to the terms of reference committed by the agency itself. 

"We know [they] have a 3rd party auditor that has no capital, has questionable capability, has no office. This puts a lot of question marks and doubt into the collection of PAGCOR as well as the collections of BIR and the whole POGO sector," he said.

"During the second or third hearing we found out the licensees were underdeclaring their taxes to BIR by about P3 to P4 billion," he added.

Earning from POGO revenues and regulating the sector at the same time is a conflict of interest, he added.

"This is a classic case of conflict of interest wherein on one hand I'm making so much money from licensees and service providers, on the other hand, I will be regulating them [and] in doing my regulation, I will be cutting off their revenue. So which one is heavier to me? Of course, it will be the revenue generation aspect because I get a lot of my profits from the revenue-generating aspect," Gatchalian said.

POGOs used to be widely welcomed due to their contribution to the economy but economic managers have shifted gears recently by saying that the social costs, such as the rise in crimes linked to operators, outweigh the positive contribution of the sector.

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