The government has allowed Philippine offshore gaming operators (POGOs) to resume operations partially during the COVID-19 lockdown after it classified them as business process outsourcing companies or BPOs. Currently, BPOs are among the few businesses that can operate under the enhanced community quarantine. In a press release this weekend, however, the agency responsible for BPO registration clarified that POGOs were actually online gambling and not BPOs.
The misunderstanding about the status of POGOs emerged last week after the Philippine Amusement and Gaming Corp (PAGCOR) Chairman Andrea Domingo said that the offshore gaming firms, which are mostly based in Metro Manila, would be allowed to reopen since they were considered BPOs. The resumption of business activity would be subject to meeting certain requirements, however, and the firms would be able to employ up to 30 percent of their workforce.
The gambling industry is currently under a complete lockdown during the coronavirus crisis and is not allowed to offer services under both enhanced and general community quarantine. Now, offshore gambling firms, which offer online services, have been included in the exemption rules that allow more than 300 outsourcing companies (BPOs) to remain open. The news was confirmed by Presidential Spokesman Harry Roque, who said that POGOs were BPOs.
The POGOs should be notified of the detailed health and security requirements on May 4. It is clear, however, that they will be able to operate on a 30 percent capacity with only registered workers who have tested negative in COVID-19 rapid tests. Moreover, these firms will need to have dedicated isolation rooms within their offices. They will need to provide task force members access to their premises. All employees will be required to wear face masks and practice social distancing.
The firms will have to pay all tax obligations up to March 2020 and the April salaries of 31,600 Filipino direct employees. In addition, operators must pay a “guarantee fee” of P300 to P350 million a month, which would be used to fund the government’s effort to tackle the coronavirus pandemic. There are more than 60 POGO license holders and over 200 service providers in the Philippines. The coronavirus lockdown was extended up to May 15 in Metro Manilla where most POGOs are based.
PEZA: POGOs Are Not BPOs
The status of POGOs as BPOs has become a controversial topic over the past few days. In an official statement, the Philippine Economic Zone Authority (PEZA) clarified that it is not authorized to register online gambling firms. PEZA is a government agency under the Department of Trade and Industry and it is responsible for registering and monitoring the business process outsourcing companies in the country.
PEZA Director General Charito Plaza said that the authority cannot register IT firms or BPOs engaged in online gambling. Currently, it has around 400 fully operating economic zones, which are spread across the country. They do not provide any online gambling services, however, but are engaged in many other sectors, including manufacturing, processing, tourism, medical tourism, and agro-industrial firms.
Moreover, the BPO industry in the Philippines includes several sectors, namely contact centers, back office, data transcription, animation, software development, engineering development, digital content, knowledge process outsourcing, game development, information technology outsourcing, and engineering services outsourcing. Since they are online gambling firms, POGOs, therefore, cannot be identified as BPOs, Plaza also pointed out.
Generally, the law differentiates between BPOs and POGOs, even though both entities share an offshore nature. BPOs can register with PEZA or with the Board of Investments. POGOs, on the other hand, are required to register and obtain a license from the Philippine Amusement and Gaming Corp. This was pointed out in a Saturday statement by the IT and Business Process Association of the Philippines, which tried to distance itself from the online gaming firms.
