Marcos bans POGOs; DOF vows job aid

President Ferdinand R. Marcos, Jr. has issued a directive to ban Philippine Offshore Gaming Operators (POGOs) effective July 22, 2024, marking a significant shift in the country’s economic and social policy. The move has been praised by Finance Secretary Ralph G. Recto, who emphasized the negative impacts of POGOs and committed to supporting displaced Filipino workers.

“I fully support his directive to ban POGOs,” Recto said. “As I have recommended to the President, POGOs come with significant reputational risks and we have seen the negative impacts and destruction they have caused to our country because of crimes. Banning them won’t significantly affect the economy because the costs of keeping them far outweigh the benefits.”

President Marcos announced the decision during his third State of the Nation Address (SONA), instructing the Philippine Amusement and Gaming Corp. (PAGCOR) to cease POGO operations by the end of the year.

The decision was based on a cost-benefit analysis report presented by Secretary Recto on June 25, 2024, which highlighted the substantial social costs and reputational risks associated with POGOs.

According to the Department of Finance (DOF), the net cost of POGO operations is approximately PHP 99.52 billion annually.

Despite the POGOs generating an estimated PHP 166.49 billion per year in economic benefits, the overall economic costs, including reputational damage and social harm, total about PHP 265.74 billion annually.

The DOF report outlined various economic benefits of POGOs, such as government revenues from taxes and gross gaming revenues, income from office and residential rentals, transportation, and increased private consumption.

However, these benefits are overshadowed by significant economic and social costs, including the negative impact on foreign direct investments, tourism, and the integrity of institutions due to the association with criminal activities.

Secretary Recto assured that the government would take steps to mitigate the impact on workers displaced by the POGO ban.

“We have until the end of the year to ensure that all displaced Filipino workers will have new jobs, and I think that is more than enough time,” he said.

“The DOF will work closely with the Department of Labor and Employment (DOLE) to ensure that the workers’ incomes will not be severely disrupted and that we provide them with proper reskilling and upskilling training for new employment.”

The decision to ban POGOs aligns with the administration’s broader efforts to address crime and improve the country’s international reputation.

The social costs, including the loss of life and psychological harm to victims of POGO-related crimes, have been a significant concern, affecting community safety and increasing anxiety.

As the year progresses, the DOF and DOLE will coordinate to provide safety nets and alternative employment opportunities for the affected workers, aiming to minimize economic disruption and ensure a smooth transition.