The global mining world looks to the Philippines as a mine-rich country, yet the latter is still a nation with the most persistent high levels of poverty. Currently, even the Philippine government’s nascent standing as a world leader in online gambling is in peril, as a growing number of Philippine offshore gambling operators (POGOs) are migrating to other gambling regulatory countries.
In March 2019, Gulf News Asia reported that the Philippines has the world’s second-largest gold deposit in the world. According to the Mines and Geosciences Bureau (MGB), the Philippines’ gold mine output in 2017 was 22.749 metric tonnes, representing only .0722% of the world total gold output of 3,150 MT in the same year. The figure had in fact went down to 20.765 metric tonnes in 2018, while the world total in 2018 increased at 3,503 metric tonnes of gold.
What’s Stopping the Philippines from Harnessing Its Gold Resources?
In March 2019 Gulf Asia News carried an article explaining why this Asian country is not regarded as one of the heavy players in the global gold mining industry. The article cited the fact that the country’s mining sector is largely untapped because mining operations, particularly for gold, can be difficult due to the nation’s political instability and proneness to turmoil.
While the predominantly Muslim, Bangsamoro in Mindanao and the Bicol region in Luzon are two of the mine-rich provinces in the Philippines, they are also the regions with the highest levels of poverty, based on reports released by the Philippine Statistics Authority (PSA). The Bangsamoro has been the subject of pacification campaigns for several years, while the rural areas of the Bicol region are heavily infested with Communist-leaning rebels.
Online Gambling Sector in Peril as POGOs Exit
The Philippines hit a gold mine, so to speak, when President Rodrigo Duterte embraced the online gambling industry upon his assumption of office in 2016. The country became an important actor in the international igaming industry when it took on the role of overseer of offshore gambling businesses in Asia.
Although the country collected as much as USD126 million in taxes from POGOs in 2019, the government is currently on track to receive less as revenues have gone down by as much as 40% in September 2020.
Although the pandemic is a contributing factor to the decline, the greater issue faced by the Philippines’ online gambling industry is that only 111 of the 218 POGOs have been allowed to resume operations post COVID-19 lockdown. The main reason being the rest were not given clearance by the Bureau of Internal Revenue for failing to make up to date payments on taxes due.
Many POGOs feel that they are being overtaxed, more so now that President Duterte approved the legislation that raIsed POGO taxes from the previous 2% to 5%. The latest report from the Philippine Amusement Gaming Corp. (PAGCOR) is that 42 operators have already requested cancellation of their POGO licensing.
In an October 2020 news report from the IAG Newsdesk, Isle of Man-based service provider Affinity Group confirmed that there’s an uptake of Philippine licensed offshore gambling operators expressing interest in getting their license in the Isle of Man. Mainly because the low-cost advantage of operating in the Philippines is no longer applicable.
Aside from the hiked 5% tax, POGOs have to pay PAGCOR hefty amounts in monthly regulatory fees and Value Added Taxes on rentals of premium commercial spaces that serve as local offices.
It is not clear though if the company operating 918kiss online casino, one of the most accessed online gambling sites in Asia, is among those that have put forward a request for cancellation of license. This is important since most Asian gamblers trust only licensed gambling sites.