Making sense of jueteng

Jueteng has been a diversion enjoyed by our ancestors, including our national hero Jose Rizal, according to history books. Historians say that Rizal used his winnings from jueteng to buy his property in Dapitan.

This piece of information tells us that this supposedly illegal numbers game is deeply rooted, a legacy of our Spanish colonization that could have almost been encoded in our genes.

If you think hard and clear about it, what makes jueteng any different from the forms of gambling that the government had legalized? Take a look at the two-digit, three-digit, or even four-digit Lotto games of the Philippine Charity Sweepstakes Office (PCSO).

These are number games similar to jueteng. Over the years, PCSO has expanded the Lotto games and earned sufficient revenues to finance not only charitable activities but also expensive high profile media exposure that was particularly useful as shown during the last presidential election.

And what about the cockfights that are almost daily occurrence in different parts of the country? And the horse-racing events where even the Senate President is an annual sponsor? All of these are forms of gambling where bettors, whether wearing rubber slippers and sandos or designer clothes and shoes, are exchanging millions of pesos for a chance of making quick and high returns.

The main difference I see between jueteng and the other forms of allowed gambling is that in jueteng the money goes to "protectors" of the illegal games, the financiers and operators, and those "lucky few" who are allowed to win from time to time and give testimonials to the validity of the jueteng draws. The government gets zilch.

Economics And Politics Of Jueteng

If estimates are correct, this numbers game is a P30-billion industry a year, which could yield taxes about half of that. This proposal had been floated in the past and revived by the group of former Finance Secretary Jose Pardo just before the May 2004 elections.

There are two jueteng draws each day in more than 40,000 barangays nationwide. In many areas, there are even three draws. In each draw, the operator could generate anywhere between P10,000 and P30,000. Perhaps even more in places more densely populated. On the low side, each draw could churn out at least P400 million throughout the country or P800 million in a day.

Even Budget Secretary Emilia Boncodin, perhaps one of the more sensible among the Cabinet officials, agrees that if jueteng is a potential source of revenue, then why not tax it?

Because jueteng is big money, politics and corruption get into the act. Pardo had advocated the legalization of jueteng right after his boss was impeached because of it. And now, father-and-son tandem of First Gentleman Mike Arroyo and Pampanga Rep. Mikey Arroyo are implicated in the same racket that did Estrada in.

In the Bicol region alone, a witness testifying before the Senate hearing said that protection money reaches about P3 million daily. And of that, supposedly P600,000 daily goes to the younger Arroyo. So if this is how much the jueteng lords can part with, just imagine how big the pie is?

Hearings To Aid Legislation

In a recent interview, Congressman Danilo Suarez from the 3rd District of Quezon Province and Chairman of the Committee on Oversight expressed the view that the ongoing hearings on jueteng should be wrapped up, and the results of the hearing be used as a basis for crafting a law to legalize and establish the structure that would regularize the jueteng number games as a legitimate business with government licensing and tax accountability.

According to Suarez, the government can collect a minimal registration fee from the operators and have it renewed yearly. Then it could impose a franchise tax on the gross earnings. The bulk of the proceeds should be plowed back to the communities where these were collected. The higher the contribution, the higher the return in the form of smoother roads, new classrooms, and improved social services.

The group of Pardo believes the collection could reach P15 billion yearly from jueteng fees and taxes, the same amount the government projected to collect from sin taxes.

Can’t Lick It, Benefit From It

When PNP General Arturo Lomibao declared recently that the Philippines is 99 percent jueteng-free hardly anybody believed him. Jueteng is a way of life in many parts of the country. The solution to the jueteng conundrum is plain and simple. Legalize it, tax it, and penalize heavily those that will still try to dodge the tax liability as this business activity becomes legitimate.

Legalized jueteng will generate revenues that will go a long way towards easing the budget deficit. The President may no longer need to trigger the increase in VAT. As a rich source of corruption, it will eventually dry up or will be more difficult to exploit. Jueteng may yet turn out as GMA’s saviour.

Forget about the Church’s pontification that jueteng destroys families and their values. Even television can do that nowadays. The more serious question is whether GMA can say "no more" to those whose expensive hobbies and lifestyle will be curtailed as the flow of money from jueteng stops.

‘Breaking Barriers’ with A. Petrucci, Amkor Phils. president

As we strive to attract new investors and industries to do business in the country, we must not overlook the needs of those already on our shores. One such is the semiconductor and electronics industry, a major contributor to the country’s export revenues. This industry has the potential of earning $50 billion in export proceeds and generating a million jobs. Such is the extent of contribution that we can expect from the semiconductor and electronics industry. This is an industry that the country cannot afford to lose. What is the strategic importance of the semiconductor and electronics industry in the Philippines? What are the industry’s problems? Is the local semiconductor and electronics industry healthy enough to compete against China, and other countries in the region? Are the incentives provided by the economic zones where most of the semiconductor and electronics companies are located competitive with those offered by other countries?

Join us in "BREAKING BARRIERS" on Wednesday, 22nd June 2005, IBC-TV13 (11 p.m.) and gain insights into the views of Anthony Michel Petrucci, president of Amkor Technology (Philippines) Inc., on various issues related to the semiconductor and electronics industry both locally and globally and how Amkor Technology, Philippines is responding. Watch it.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected] or at [email protected]. If you wish to view the previous columns, you may visit my website at http://bizlinks.linkedge.biz.