THE shutdown of overseas gaming operations will have a minimal impact in terms of financial flows, according to an initial analysis performed by the Anti-Money Laundering Council (AMLC).
AMLC Executive Director Mel Georgie B. Racela said that the financial analysis, conducted at the request of the central bank chief, only considered the “inward and outward remittances,” and not the impact of foregone taxes should the industry, known by its Philippine acronym POGO, leave the Philippines or shutdown.
POGOs, whose main clients are Chinese, are a current source of tension between China and the Philippines because Beijing believes the industry undermines its controls on hard-currency flows and its ban on gambling.
The registration of POGOs has led to a boom in office space while also creating an influx of Chinese workers, which the Department of Finance is eager to tax.
“Maliit lang yung impact nung kanilang transactions (The impact of their transactions is small ), at least from the AMLC’s perspective. It’s very minimal compared to GDP (gross domestic product),” Mr. Racela told reporters following the agency’s Senate budget hearing on Thursday.
“Ang aming analysis kasi is financial flow analysis so ‘yung inward remittances and outward remittances, ‘yun lang ang aming na-capture (Our analysis only captured financial flows — inward and outward remittances,)” Mr. Racela said.
The limited nature of cross-border remittances suggests that the industry settles accounts internally with its Chinese clients, who are limited by Chinese foreign exchange regulations from bringing money out of the Mainland.
He said further details of the study are not ready for release pending further analysis, with the central bank currently in possession of the raw data.
The study was ordered by Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno.
Late last month, Mr. Diokno said he ordered the AMLC team and officials overseeing financial stability to assess the impact of operations by Philippine Offshore Gaming Operators (POGOs) on the economy should they pull out.
“What if, all of a sudden, they pack up and leave? What will be the impact of that on the property sector plus also the food industry, the restaurants? So this is part of my job as BSP governor,” Mr. Diokno said in an economic forum in Manila late last month.
On Wednesday, the Bureau of Internal Revenue padlocked Great Empire Gaming and Amusement Corp. (GEGAC) in Quezon City after finding out that it was not registered for value-added tax.
The POGO service provider had more than 8,000 foreign employees in its Quezon City branch and a few hundred more in its offices in Parañaque and Subic.
AMLC’s proposed 2020 budget was approved at committee level and will be sent to the plenary.
The P145.201 million proposed budget is 128.75% higher than its current budget of P63.475 million.
Mr. Racela said the increased budget was due to a reorganization, adoption of encryption technology and enhancement of enterprise security, as well as international and domestic commitments. — Beatrice M. Laforga