Tax revenues from POGOs more than doubled in 2022

MANILA, Philippines — Taxes collected from Philippine offshore gaming operators surged in 2022, partly on the back of a reopened economy and pandemic-era reforms that sought to squeeze more revenues from the controversial industry.

Data sent by the Department of Finance to Philstar.com on Friday showed that total tax revenues reaped from POGOs skyrocketed 127% year-on-year to P8.878 billion in 2022. This was significantly larger compared to the P3.91 billion raked in back in 2021. 

Broken down, POGOs paid income taxes that amounted to a total of P805.9 million in 2022. Offshore gaming operators shelled out a total of P43.2 million for business tax in the same period.

Gaming taxes collected from the sector generated a total of P3.65 billion in 2022. 

The offshore gaming industry has courted scandal since rising to prominence in past years. Past administrations maintained on-and-off relationships with POGOs, whose workers mostly hailing from China as the world’s second-largest economy already banned gambling.

POGOs generate guaranteed revenues for the government but some have criticized their links to money laundering and crime syndicates. At the same time, the local real estate industry also cashed in on POGOs, occupying 5% of total leasable office spaces across the country, according to data from Colliers Philippines in 2022.

Still, the sector endured heavy losses throughout the pandemic, as some operators and firms opposed the previous Duterte administration’s policy to increase government share from tax earnings. At the same time, some left as mobility restrictions left gaming houses virtually empty. 

That said, the national government effectively legalized the presence of POGOs by signing Republic Act 11590 into law, which imposed these tax rates on the sector. The move materialized in 2021, amid outsized concerns about the previous Duterte administration’s pro-China stance.

Finance Sec. Benjamin Diokno said in June that he wanted to bid POGOs farewell, despite a possible revenue shortfall from their exit. He spotlighted reputational risks and social costs that came with their presence, raising concerns about why the Philippines remained on the Financial Action Task Force’s “gray list.”

The Anti-Money Laundering Council flagged security concerns in the sector back in March 2020, as some transactions from POGOs were revealed to have alleged links to drug trafficking.

Diokno said the national government could “get revenues from lots of other sources.”