The BPO (business\nprocess outsourcing) industry was booming in the early 2000s where it helped\nrevive the Philippine economy. In terms of revenues, BPOs registered a revenue\ngrowth rate of 43% in the period of 2005-2009 (annual average). The government\nhas relied on the BPO industry for economic growth but even that is slowing\ndown as seen in the decline of BPO investments in the country. <\/p>\n\n\n\n
The slowdown may be\nattributed to other countries offering better incentives for BPOs such as tax\ncuts. The IBPAP (Information Technology and Business\nProcess Association of the Philippines) stated that the cost of operating Philippine BPOs is more expensive than\nIndia by 17 percent. IBPAP estimates that the BPO industry will mature in\n2022. <\/p>\n\n\n\n
A 2012 report by the\nAsian Development Bank (ADB) has raised concerns on the BPO industry saying\nthat it was the fastest growing sector from 2005 to 2012 but only took in one\npercent of the labor force. <\/p>\n\n\n\n
But now, the government seems to be replacing BPOs with Philippine Offshore Gaming Operators (POGOs) as the future of the services sector.<\/p>\n\n\n\n
The POGO matrix<\/strong><\/p>\n\n\n\n POGOs are online gambling companies set up in the country but catering to mainland Chinese gamblers. To be a licensed POGO, one must apply for a license at the Philippine Amusement and Gaming Corporation (PAGCOR). Operators can either be a Philippine-based or a foreign-based operator. <\/p>\n\n\n\n A Philippine-based\noperator has to present a Securities and Exchange Commission (SEC) registration\nto acquire a license, while a foreign-based operator would need to partner with\na local gaming agent from the Philippines. Aside from other documentary\nrequirements the application fee for a POGO can range from US$120,000 to\nUS$500,000. This needs to be renewed every three years wherein the same fee is\nstill paid. The local agent of the\nforeign-based operator also pays an application fee of around US$60,000.<\/p>\n\n\n\n Aside from the POGO\nitself, service providers also need to be licensed. These provide customer\nrelations, live studio and streaming, gaming software\/platform, IT support, and\nstrategic support services to POGOs. Depending on what kind they are, service\nproviders also have to register with PAGCOR with application fees ranging from\nUS$30,000 to US$150,000. <\/p>\n\n\n\n There are currently 58\nPOGO operators registered with PAGCOR and 218 service providers. Preliminary\ndata from PAGCOR reports 87,054 POGO employees in the country as of September\n2019. Meanwhile, the Bureau of Internal Revenue (BIR), using data from various\ngovernment agencies, reports 108,914 POGO employees in the country. <\/p>\n\n\n\n The government earns a\nlot from application fees paid by POGOs, service providers, and even the local\ngaming agents. They also earn from license fees and bond fees for POGOs.<\/p>\n\n\n\n Big revenues<\/strong><\/p>\n\n\n\n In 2018, PAGCOR took\nin Php6 billion from POGOs through licensing fees and royalties and this is\nexpected to increase to Php8 billion by the end of 2019. The BIR also reported\nthat they collected Php579 million-worth of taxes from POGO employees in 2018.\nThis tripled to Php1.8 billion in collected taxes from January to September\n2019.<\/p>\n\n\n\n POGOs also contribute\nto the rising real estate prices of office spaces. Data from PAGCOR reveals\nthat POGOs are mainly located in Makati and Pasay. Service providers are also\nmainly located in condominium units in these cities. A typical POGO operation\nneeds 64 square meters (sq m) of space which is typical of condominiums. <\/p>\n\n\n\n Leechiu Property Consultants (LPC) revealed\nin a report that in the last four\nyears, the cost of condominium units near the Manila Bay area increased by 80% from\nthe buying range of Php90,400\/sq m \u2013 Php340,500 \/sq m to Php113,000\/sq m \u2013 Php432,000\/sq\nm. This is in line with the growing trend of POGOs being located in Makati and\nPasay. <\/p>\n\n\n\n POGOs also made up the\nbiggest part or 38% of Metro Manila\u2019s office space demand as of third quarter\nin 2019, overtaking for the first time the IT-BPM (Information Technology and\nBusiness Process Management) industry\u2019s demand at just 30 percent. In 2018,\nIT-BPM office space demand comprised 36% of transactions, while POGOs followed\nat 24 percent.<\/p>\n\n\n\n With the slowing down\nof BPO investments and even overseas Filipino workers (OFW) purchases of condominium\nunits, POGOs are boosting the slowing services sector as well as the real\nestate sector. Because of this contribution to economic growth, the government\ndoes not seem intent on stopping their operations. This is despite the\ncontroversies surrounding POGOs such as money laundering, kidnapping incidents\nand employing mostly Chinese citizens, and of course, gambling being a\nparasitic economic activity. <\/p>\n\n\n\n The Chinese government\nhas already asked the Philippines to stop the licensing of all POGO operations\ndue to possible illegal activities. PAGCOR, however, has only suspended the\nissuance of new licenses while continuing existing licenses and renewals. This call\nfrom the Chinese government is a hypocrisy. China has banned gambling in its\nshores, but operators only moved out of China and went to countries offering\nbetter incentives. China still benefits from POGO operations due to employment\nopportunities for its thousands of citizens who have low educational attainment\nand cannot find work. Chinese citizens\nfinding employment in the Philippines is better for the Xi Jin Ping government\nsince people\u2019s dissatisfaction could destabilize its rule.<\/p>\n\n\n\n Meanwhile, a POGO Tax\nBill has already been approved by the House Means and Ways committee and awaits\ndeliberation. The bill will only slightly increase the annual gross corporate\nincome tax of POGOs from a miniscule 2 to 5 percent. It will also enforce that\nPOGO employees pay 25% in personal income taxes. If passed, the POGO Tax Bill\nis claimed to increase the country\u2019s gross domestic product by 1.2-1.5 percent.\n<\/p>\n\n\n\n Little help to PH\njobs<\/strong><\/p>\n\n\n\n There has been a lot\nof talk about Chinese workers in the Philippines, especially those working for\nPOGOs. Majority of those employed under\nPOGOs are in service providers that mainly work in customer service. Because\nmost POGO clients are Chinese gamblers, proficiency in Mandarin is required. Of\nthe 87,054 POGO employees reported by PAGCOR, 71.5% are Chinese, 16.6% are\nFilipinos, 2.6% are Vietnamese, and the rest are various other\nnationalities. <\/p>\n\n\n\n Government monitoring\nand data on the extent and profile of POGO workers appears to be limited, as\nseen by the varying employment figures of PAGCOR and the BIR. But various\nreports indicate that most Chinese POGO workers come from far-flung Chinese\nvillages. With no other employment opportunities in Beijing, they enter POGOs\nand are sent to the Philippines to work. Some even lack the proper documents to\nwork in the country. <\/p>\n\n\n\n There are also\naccounts of several Chinese workers staying in cramped condominium units. In\nsome cases, as many as eight workers stay in one 24 sq m-sized condominium unit\nand have to sleep in shifts. Moreover,\nthere are reports of Chinese nationals operating small shops inside\ncondominiums, such as small eateries that cater to Chinese POGO workers.<\/p>\n\n\n\n Rousing the economy<\/strong><\/p>\n\n\n\n Decades of neoliberal\npolicies have weakened the Philippine economy to the point of being overly service\noriented while agriculture and manufacturing \u2013 productive sectors needed for\nsustained national development and job creation – are left behind. <\/p>\n\n\n\n POGOs may have\ntemporarily made up for slowing BPO investments but once POGOs slow down, what\ncomes next? It is turning out to be another service-oriented \u2013 and even\nforeign-catering \u2013 industry that brings temporary and minimal benefits to the\ncountry. That is unless the government prioritizes and develops Filipino\nconsumer, intermediate and capital good industries. The government can protect\nour local industries rather than open up the country to foreign companies. <\/p>\n\n\n\n Upholding an\nindependent foreign policy is also important if we want to attain genuine\neconomic development. The Philippines can adapt to changes in the global\neconomy by shifting to domestic demand-driven growth. But unless government\noverhauls its programs and policies to prioritize domestic industries and\nagriculture and the people\u2019s welfare, the same failed neoliberal policies will\nbe perpetuated. The Philippine economy and Filipinos will remain vulnerable and\ndependent on big business interests and the vagaries of the global market. ###<\/p>\n\n\n\n Photo from onlinecasinoreports.ph<\/em><\/p>","protected":false},"excerpt":{"rendered":" BY JOSE LORENZO LIM<\/p>\n The government has relied on the BPO industry for economic growth but even that is slowing down as seen in the decline of BPO investments in the country. Now, the government seems to be replacing BPOs with POGOs as the future of the services sector.<\/p>","protected":false},"author":7,"featured_media":8914,"comment_status":"open","ping_status":"open","sticky":false,"template":"single-nosidebarbanner.php","format":"standard","meta":{"_acf_changed":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":"","_expiration-date-status":"saved","_expiration-date":0,"_expiration-date-type":"","_expiration-date-categories":[],"_expiration-date-options":[]},"categories":[2048,3],"tags":[1834,1902,432,347,2136,1463,116,2132,2131,2047,2133],"acf":[],"_links":{"self":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/8913"}],"collection":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/comments?post=8913"}],"version-history":[{"count":3,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/8913\/revisions"}],"predecessor-version":[{"id":9117,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/8913\/revisions\/9117"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/media\/8914"}],"wp:attachment":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/media?parent=8913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/categories?post=8913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/tags?post=8913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}