No cure in sight: Three corruption stories under Duterte’s watch

THIS THIRD part concludes the series and reviews the coverage of the Philippine Offshore Gaming Operators (POGOs) industry.

Amidst the strict lockdowns and health protocols in 2022, the Duterte administration drew flak for allowing POGOs to resume operations in April. According to the Philippine Amusement and Gaming Corporation (PAGCOR), POGOs “provide and participate in offshore gaming services i.e., provides the game to players, takes bets and pays players’ winnings.” A Senate panel’s investigation into criminal activities involving POGO employees, led to more information that uncovered a PHP40 billion bribery scheme at the Bureau of Immigration (BI). So far, government has not acted to exact accountability for any of these crimes. The Marcos administration has yet to show any sign to act on these cases.

POGOs and PHP40 billion in “pastillas”

What happened:
In February 2020, the month before the declaration of the first community quarantine and lock down in the country in March, Senator Risa Hontiveros exposed what is now known as the “pastillas scheme” in the Bureau of Immigration (BI). 

The Senator presented evidence showing that the BI was at the center of a money-making scheme allowing the illegal entry into the country of thousands of Chinese POGO workers. The bribes given to corrupt officials were rolled up in a fashion similar to a local milk candy, giving the scheme its name. 

Hontiveros, who chaired the Senate’s Committee on Women, Children, Family Relations and Gender Equality, was initially investigating the link between the rise of the POGO industry and an uptick in crimes involving women victims, such as sex and human trafficking. 

This added to the list of criminal activities already associated with POGOs: kidnappings, killings, bribery, and money laundering. Duterte responded by insisting that POGOs are “clean” and not involved in corruption.   

How did the government responded:
POGOs, like most businesses in the country, were forced to halt operations in March 2020, in compliance with mandatory community quarantine rules. Many Chinese nationals working in these companies departed the country. 

In April 2020,  the government was reported as considering the resumption of POGO activities to replenish state funds that were quickly running out due to pandemic costs.

A month later in May, it was reported that partial operations of the controversial gaming firms could resume after POGOs were re-classified as Business Process Outsourcing (BPO) entities, which were already being allowed to operate at the time. An angry public denounced the announcement as so many Filipinos were losing jobs and income with industries and companies, classified as “non-essential,” shut down. To consider online gambling as essential was rubbing salt on the wounds of workers who lost their jobs.  

Duterte explained the decision was borne out of necessity: the pandemic response drained public funds and POGOs were a necessary funding source. 

In July 2021, more than a year after allowing POGOs to be one of the first sectors to resume activities, Duterte defended his decision again. He even urged more operators to set up shop in the country. This was something of a reversal of his threats and crackdown against POGOs made pre-pandemic. 

By October, Hontiveros’ Senate panel investigation had held seven hearings on the BI’s “pastillas scheme.” The Senator announced that based on their investigation, the alleged leaders of the scheme managed to accumulate up to PHP40 billion in bribes. 

BI insiders who turned state witness aided the Senate in uncovering the facts of the corruption scandal. The testimony of the whistleblowers pointed to Marc Red Mariñas, the BI’s Port Operations Division (POD) chief, as the alleged mastermind.

Media’s coverage of the issue in 2022

Unlike the PhilHealth and Pharmally scandals, POGO issues did not rise as an electoral issue. News instead followed a shift from the Duterte policy and reflected a convergence of official views that the current administration regarded the POGOs as a negative rather than a positive factor for the country. 

In June, officials involved in the “Pastillas scheme” were indicted by the Ombudsman. At least 40 individuals faced graft complaints including Mariñas. 

News accounts also noted the national police assessed the rise of “POGO-related kidnappings” to 25 percent from January to September.

A key member of Marcos’ much-touted economic team expressed on September 15 that the country may be better off without the crime-linked POGOs. At a Senate budget hearing, Finance Secretary Benjamin Diokno told lawmakers that he wanted POGOs “discontinued” in the country, citing their “social cost” as overshadowing their economic benefits.

Ralf Rivas, a business reporter for Rappler, revealed the potential impact to the business sector of such a move a few days after Diokno’s statements. 

Inquirer.net’s Kurt Dela Pena likewise reported on the “pros and cons” of allowing POGO operations to continue, as lawmakers debated on the best course of action.

Philippine business groups weighed in on the issue as well. A joint statement from the Management Association of the Philippines (MAP), Makati Business Club (MBC), and the Foundation for Economic Freedom (FEF) backed Diokno’s call to close down POGOs over their associated “social cost.”

In November, the government cracked down on illegal POGOs. A total of 44 workers employed by illegal POGOs were deported out of the country, according to the BI.  

Meanwhile, hearings continued on the possibility of discontinuing POGO operations in the country. On November 23, Sen. Sherwin Gatchalian slammed a proposal by PAGCOR aiming to grow POGO revenues in the country. The Senator found the agency’s goal of reaching PHP10 billion in revenues by 2027 unrealistic, since PAGCOR officials when asked were unable to back their proposal with details.

CNN Philippines’ Kristel Limpot and Jelo Mantaring evaluated the arguments raised against POGOs in a November 30 report.

Conclusion 

Marcos’ close links with Rodrigo Duterte will be tested by these cases. Indeed, there are doubts about how these cases can be resolved with justice, given the continued links between the two administrations. 

Nothing much can happen unless the media pick up on the cases and place them on the front burners of the news agenda. Journalists cannot wait for developments to happen but must follow up with reviews, backgrounders, and updates on their own. They must get ahead and do the work on their own, investigating, researching, and finding the secrets in files, documents and financial records. 

Journalists must make these stories timely and relevant, linked to the concerns about onions and smuggling, the connections to power revealed as the enablers of corruption These are all part of the same deeply embedded problem, because only some are caught but those ultimately responsible evade accountability. 

When the official process stalls, media must shift to a more proactive approach that can cause the story to unfold, encourage more truth-tellers to talk about what they know. The news can stimulate the public to become more vigilant, remembering the record, engaging in public discussion about these cases. 

Only with media and public work together can they constitute the necessary power to diminish corruption.