Flip-flopping peacock

In the conduct of the probe on Philippine Offshore Gaming Operators, Senate Ways and Means Committee chairman, Sen. Sherwin Gatchalian, is full of self-contradiction.

This may indicate that the solon is merely shooting from the hip and has a confused appreciation of the issue.

In assailing the thriving industry, he questioned the sustainability of POGOs claiming they are not stable. “It is illegal in China,” he volunteered.

He added that POGOs failed to live up to their promise of contributing from P40 billion to P50 billion annually to government revenues but only P4 billion in taxes and fees were collected.

“My point is we’re allowing illegal businesses here, not stable ones. We want stable investments with a future, (ones) that create jobs,” the senator said implying that POGOs contributed little to Filipinos yearly.

In a panel probe later, he admitted POGOs, directly and indirectly, contributed a “significant” percentage to the country’s gross domestic product citing his committee’s computations.

He ceded that the government collected P10.188 billion in real estate taxes, P7.465 billion in taxes on retail stores selling household items, communications devices, and other goods, and P7.260 billion from the 5 percent franchise tax.

Other gains from POGOs are P3.07 billion in 25 percent withholding tax for foreign nationals, P1.778 billion in the 12 percent value-added tax, P1.683 billion in tax on food service activities, P1.583 billion in remittance to the national government, P1.410 billion in foregone tax on utilities, P232 million in 25 percent corporate income tax, and P4.312 million in income tax.

The numbers that Gatchalian cranked out appear understated as National Economic and Development Authority Undersecretary Rose Edillon said the contribution of POGOs this year is P53 billion and in the banner year of 2019 was P104.5 billion that included an indirect economic contribution from real estate, housing, and management facilities.

The more reliable NEDA figures showed salaries, transportation, insurance, and social contributions of both Filipino and foreign workers are at 0.53 percent and with a multiplier effect, at .67 percent.

In 2022, POGO contribution to GDP is 0.25 percent and with a multiplier effect, of 0.31 percent.

From January to June 2022, the government figures bared 16,700 Filipinos employed in POGOs, and indirect job beneficiaries are the 20,000 employed in the food and beverage, farming and fishing,
technology, transportation, and real estate which are support sectors of POGOs. In 2019, indirect employment was 25,000, and direct employment was 21,000, according to government figures.

Real estate expert David Leechiu said the real estate sector will lose P19 billion in rent if POGOs leave the country adding about 2 million square meters of the sector’s residential space, which are twice as much as office space, will also be vacated.

Leechiu, in the Senate hearing, said the “government is just as invested in collections of fees and taxes from other businesses that grow with POGOs.

Based on data that Leechiu provided, POGOs pay 1,200 to P1,500 per square meter in the office sector.

He added that the government will miss out on the 12 percent value-added tax on rentals, amounting to about P160 to P220 per square meter in office space, or P160 million to P220 million.
A condominium glut will further impact the economy, Leechiu warned.

Recently, Gatchalian accused POGOs of cheating the government of P1.9 billion through the under-declaration of their income which is against what is in the records of the Bureau of Internal Revenue.

The irrepressible senator is fishing for political brownie points by keeping a stream of unfounded allegations and fudged figures on POGOs.

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