Senator Win Gatchalian stressed that the social costs of allowing Philippine Offshore Gaming Operators (POGO) in the country outweigh the economic benefits, citing a cost-benefit analysis (CBA) conducted on the industry.
He said based on the CBA, the social and economic costs and ills attributed to POGOs such as crimes, tax evasion, corruption, foregone foreign direct investments, (FDIs) and tourism estimated at P143.30 billion outweigh economic benefits of P134.86 billion which implies a net cost to the country of P 8.44 billion in 2021.
“While the monetary values of social costs are difficult to compute, there is no financial amount that can be easily assigned to the life and dignity of direct victims of human trafficking, prostitution, and kidnapping,” Gatchalian said.
In addition, based on a position paper submitted by the Department of Finance (DOF), social costs include investor perceptions, which can lead to negative consequences such as loss of current and potential investments, jobs, and revenues, Gatchalian said.
Citing the same position paper, Gatchalian said that the best estimate of the economic cost of social problems coming from challenges attributed to the POGO industry would be the amount of additional resources needed by law enforcement agencies to completely prevent and eliminate the social costs brought about by POGO-related crimes without forgoing or compromising their other functions.
He stressed that costs relating to law enforcement are expected to increase if the incidence of these crimes rises.
The Senate Committee on Ways and Means, chaired by Gatchalian, conducted an inquiry into the social cost of allowing POGO operations in the country following a surge in criminal activities such as kidnapping, illegal detention, prostitution, and money laundering attributed to POGOs.
It was revealed in the hearings conducted in relation to the inquiry that in terms of revenue collection, POGOs contributed only roughly less than 1% of the country’s gross domestic product (GDP) in 2021.