Who will benefit from China’s online gambling boom in the Philippines? (Part 4)

The risk of money laundering

Many are concerned about the possibility that these Chinese-owned gambling companies are used to launder money. Lucio Pitlo, a China researcher, said that Philippine banking security laws made it difficult for the government to investigate accounts. And this law can be taken advantage of by money laundering criminal organizations.

Over the past few years, the Philippine National Assembly has expressed its concerns about the increasing number of illegal migrant workers. Investigations into the gambling fever in the Philippines have also been made, but nowhere else.

Pagcor prohibits Filipinos from gambling online, but many Chinese people still have access to Chinese-run gambling sites.

The Philippine government has not shown any aggressive suppression of gambling activities. Even the management is weak and dripping. Observers argue that the online gambling industry boomed by privileged groups in the Philippines has benefited tremendously from this wave.

Real estate benefit

Some areas benefit greatly from online gambling in the Philippines. According to Camba, gambling has saved the Philippine real estate industry. The real estate bubble did not burst thanks to gambling companies that rented an office.

Around 2004, real estate companies began building many office buildings in Manila and major cities due to expectations of the growth and expansion of the BPO industry (outsourcing partners to provide services). service management and customer care).

However, the BPO market soon saturated. In the period 2015-2016, many office buildings in Manila fell into a state of sluggishness. But thanks to online gambling, the Philippine real estate industry does not collapse. A survey by Pronove Tai Real Estate Consulting Company shows the demand for corporate office gambling increased by 118% in the first quarter of 2019.

Gambling businesses have added 796,000 square meters of office space since 2016, when President Duterte came to power. It is likely that the area of ​​online gambling offices in the Philippines will reach 1 million m2 in 2019. In addition, apartment prices in the Philippines also increased accordingly.

According to Rappler, the explosion of online gambling is something many Filipinos cannot understand. Of course, the Philippine real estate industry benefits, many Filipinos have more jobs. However, the risks of an obscure industry, closely related to criminal activities, are not to be missed.

The Philippines government has been making some moves to tighten the management of gambling companies over the past few years, but Rappler commented that Chinese companies should still make a profit.

The gambling frenzy and massive influx of migrant workers from China are problems that the Philippines will have to spend a lot of time trying to solve.

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Who will benefit from China’s online gambling boom in the Philippines? (Part 3)

Technically, the company is like an IT company, not even a support center, but actually a part of the gambling ecosystem. Currently, there are more than 56 online gambling development companies approved by Pagcor, but there may be many unregistered companies to evade taxes.

The booming industry has led to suspicious labor sources from China and immigration law issues in the Philippines. Many workers enter the Philippines as tourists.

In 2018, more than 1.2 million Chinese tourists came to the Philippines, just behind 1.6 million to South Korea. For many tourists, their “attraction” is the online gambling industry.

Pagcor terrible profit

The Philippine Ministry of Finance estimates the government lost 32 billion pesos ($ 629 million) in income taxes from about 140,000 foreign workers in the online gambling industry. To solve the problem, the Internal Revenue Service issued a regulation requiring foreign workers to have a tax code before working in this country.

Foreign workers are also registered with the competent district tax office (RDO) for the employer’s real address. Other foreign workers who already have a work visa or work permit issued by the Immigration Department (BI) are also required to register with the RDO.

The inter-agency task force, comprising DOF, BI, Pagor, Ministry of Labor and Employment, National Bureau of Investigation, and Ministry of Justice, monitors online game companies. Illegal Chinese workers were also arrested, but Jake said the case could be denounced by a competing company.

Pagcor has yet to disclose the income of online gambling businesses and the size of the industry. However, Pagcor’s unusual rise in income suggests that the online gambling industry helps the agency make a profit.

In the first 4 months of 2019, Pagcor Cotton posted a growth of 11.4% with a total revenue of 25.09 billion pesos ($ 492.6 million). This figure exceeded 2.57 billion pesos (US $50 million) compared to the same period last year.

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