Online gambling and the mysterious death of a Chinese national in Manila will be hot topics when the leaders of China and the Philippines meet later this month.
This past weekend, the Inquirer quoted Philippine Finance Secretary Carlos Dominguez III saying online gambling would likely be among the topics up for discussion when Philippine President Rodrigo Duterte meets Chinese President Xi Jinping at their meeting in Beijing later this month. The exact date for the meeting has yet to be set.
Doninguez’s comments came just days after the Chinese embassy in Manila issued a statement accusing Philippine Offshore Gaming Operators (POGOs) of severely undermining China’s financial security and expressing “grave concern” over the safety of Chinese nationals working in the Philippine gaming sector.
POGOs, which hold licenses issued by the Philippine Amusement and Gaming Corporation (PAGCOR), overwhelmingly cater to customers based in China, so POGOs employ tens of thousands of Chinese nationals as support staff. Many of these staffers have complained about harsh working conditions that the Chinese embassy called “modern slavery.”
The POGO staff situation took an alarming turn this weekend after Yang Kang, a 27-year old Chinese national who came to the Philippines to work in ‘information technology,’ died after falling from a sixth-floor window of an office tower in Las Piñas City in Metro Manila. (24 Oras obtained video surveillance footage of Yang apparently trying to escape, viewable at the bottom of this article.)
Disturbingly, Yang was wearing handcuffs at the time of his fall, leading police to suspect that he was being held against his will by his Chinese employer, presumably over an unpaid debt that he was working off. Philippine authorities have identified Li Yun Xiang, who supervised the call center where Yang worked, as a suspect in Yang’s death.
The Chinese embassy urged Philippine authorities to “bring the perpetrators to justice” and to “continue to take concrete and effective measures to protect the legitimate rights and interest of Chinese citizens in the Philippines.” Duterte’s office said the government will “not allow or tolerate” abuse of foreign nationals.
PAGCOR DEFENDS POGO HUBS
China’s embassy had also taken exception with PAGCOR’s plans to open two ‘hubs’ on Manila’s fringes that would host POGO infrastructure and their Chinese staff. The move was partly intended to alleviate pressure on Manila’s tight real estate market but the embassy said this ‘segregation’ would infringe on Chinese nationals’ legal right to freedom of movement.
Following the embassy’s statement, PAGCOR offered reassurances that Chinese nationals working in POGO hubs would be “free to go wherever they may want to, do whatever they may want, within the limits of the law.” PAGCOR also said local authorities would be better able to protect Chinese nationals “from harassment and harm” if they were congregated in certain areas.
The hubs were intended to help the Philippine Bureau of Internal Revenue (BIR) track Chinese staff to make sure they were legally allowed to work in the Philippines and that their POGO employers were collecting withholding taxes on their staff’s wages.
On Tuesday, Philippine Senator Win Gatchalian introduced a resolution seeking an inquiry into uncollected taxes from both registered and unregistered foreign workers, including those working for POGOs. The resolution cited estimates of around 130k POGO staff who have yet to register with the BIR for tax purposes.
POGO WARNING ABOUT LARGER MATTERS?
POGOs have become an increasingly important financial contributor to the Philippine government’s coffers, leaving Duterte in the unfortunate position of having to defend them when he meets with China’s president this month.
China doesn’t permit any form of gambling on the mainland outside its state-run lotteries, and it has acted aggressively against operators who dare run online gambling operations from Chinese soil. But given that the Philippine-based online gambling industry has been catering to Chinese punters for years, it’s unclear what prompted China to speak up so forcefully now.
It’s potentially significant that the Chinese embassy’s statement came just days after Duterte suggested he would raise the issue of China’s disputed claims on Philippine territory in the South China Sea when he met with Xi. China may be signalling that it has the power to dismantle Duterte’s new POGO cash cow if he raises a stink about the far more lucrative resources on the sea floor that China claims as its own.