SOCIAL protection for the 83,000-plus foreign nationals (FNs) employed by the flourishing Philippine Offshore Gaming Operators (Pogo)-related business establishments and service providers remains uncertain, at the most, notwithstanding the Philippine government’s efforts to revamp its expat recruitment policies this year.
Labor officials earlier said the Labor Code guarantees that even foreign workers enjoy general labor standards (GLS) and protection through occupational safety and health standards (OSH) similar to those of their local counterparts as long as they are working legally in the country.
These include having the necessary 9G, or Prearranged Employment Visa from the Bureau of Immigration (BI), as well as Alien Employment Permit (AEP) from the Department of Labor and Employment (DOLE).
An AEP is a document issued by the DOLE to FNs, who will be locally employed in a position where no Filipino can perform the tasks, for more than six months. It is determined through a so-called labor market test.
While the fluency of FNs, particularly Chinese nationals, to speak their native tongue may have played a big factor in their landing a Pogo job here, such fluency could also be the same factor for why they are having a hard time accessing their social welfare benefits. They hardly speak any other language.
Chinese dominated
Most Pogo firms licensed by the Philippine Amusement and Gaming Corp. (Pagcor) target clients from mainland China, thus, majority of their workforce are Mandarin-speaking Chinese nationals.
As of December 10, DOLE said the 153 Pogo-related firms employed 118,239 employees, of which 82.28 percent or 97,283 are foreigners, while only 17.72 percent or 20,956 are Filipinos.
Of the said 97,283 FNs in the Pogo field, 77 percent or 75,028 are Chinese nationals.
Labor Assistant Secretary Benjo M. Benavidez said the Chinese nationals are mostly designated in positions in Pogo-related firms that will require them to interact with clients, who are usually also Chinese nationals.
Meanwhile, he said, Filipino workers are employed as back-office support and in administrative positions.
Citing the results of their labor market tests for the AEP issuance, the labor official said there are currently no Filipino workers who are “competent, able and willing” to replace Chinese workers in the Pogo industry.
Currently, there are pending efforts from the Technical Education and Skills Development Authority (Tesda) and the Department of Education (DepEd) to create the country’s pool of Filipinos who can speak Mandarin.
Cause and effect
The booming Pogo industry started in 2016 after Pagcor issued a new policy enabling it.
Immediately after, the overall number of AEP holders in the country skyrocketed from 28,371 in 2015 to 41,993 the following year.
The increase in AEP holders continued at 45,288 in 2017 and 54,241 in 2018. And as of December 10, 2019, Bureau of Local Employment (BLE) Director Dominique R. Tutay said their numbers have reached 83,764.
About 3 out of every 4 of those with AEPs this year applied in Metro Manila, which makes it the region with the highest concentration of FNs nationwide.
Tutay said the figures could still increase since their current count only accounts for FNs hired by Pogo-related firms under the jurisdiction of Pagcor and still excludes those from Pogos in economic zones.
The labor official, however, said the sustainability of the said growth rate in FNs in Pogo firms will depend on the policy environment in the country and even in China, where gambling is prohibited.
Among the government reforms that could minimize Pogo operations is the plan of Congress to impose a 5-percent franchise tax for Pogo-related firms and to raise the withholding tax for FNs employed in the said companies.
But even before the said proposal, DOLE had already projected the number of FNs employed by Pogos to eventually plateau to a certain point since Pagcor became more strict in its licensing requirements and activities.
“We expect the level will be between 100,000 and 130,000 since these are the figures earlier reported by Pagcor,” Tutay said, adding that they are merely validating the figures given by Pagcor.
Employment concern
With over 2 million unemployed people in the country, the arrival of at least 80,000 FNs in the Philippines to find work did not sit well with some Filipinos.
Some lawmakers expressed alarm over the trend since most of these FNs allegedly took away job opportunities from local workers—notwithstanding DOLE’s labor market tests showing no Filipinos able to handle the work these Chinese do—and led to an increase in criminality in areas with large concentrations of Pogos.
Reports of kidnappings and prostitution involving Pogo workers have been played up in the media, leading to more officials opposing the industry’s operations. The most recent incident involves the kidnapping of a Chinese woman in Makati, prompting its local government to stop issuing business permits to new Pogo firms.
This likewise triggered an interagency review of the country’s policy in processing foreign workers, which exposed several “gaps,” including varying government data on the exact number of FNs employed in the country, as well as inconsistent policies for the issuance of the necessary permits for them.
The policies on taxation for these FNs, who were hired locally, were also raised in the process.
Aftermath registration
All of these were addressed in the three new instruments released by the interagency task force, which was created this year to address all of these concerns.
Tutay said the instruments include Joint Guidelines, signed last May, mandating all FNs working in Pogos to avail themselves of SWPs; the Joint Memorandum Circular, signed in July, making Taxpayer Identification Number (TIN) documentary requirement for the application of AEPs. It also made all government agencies, which issue work-related permits, to secure a Certificate of No Objection from the DOLE.
These instruments also led to the DOLE conducting a national inventory of all FNs employed in the country, as instructed by the Department of Finance (DOF).
Tutay said they inspected 237 Pogo-related establishments and 228 Pogo service providers this year.
She said the remaining 49 Pogo-related firms and 141 Pogo service providers will be inspected by the first quarter of 2020.
“We would probably resume inspection by January 15 or early February,” Tutay said.
Social welfare benefits
During the course of their inventory, Tutay said they found that all of the FNs employed in Pogo-related firms and service providers should enjoy social security, at least on paper.
She noted that all the payrolls of the Pogo firms they reviewed indicated the premiums of the FNs to Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund (Pag-IBIG).
However, there are some concerns that not all of the said premiums are being remitted to the concerned government social welfare agencies.
Tutay said a month ago, the SSS approached the DOLE to ask for a copy of FNs in the Pogo industry to conduct its own inspection and determine possible non-remittance of premiums.
“They noticed that in certain sectors where there are Pogos, there were still low remittances. So they are trying to find out where the bulk [of the foreign Pogo workers] are based. This is what they are plowing through,” Tutay explained.
She said non-compliance with GLS and OSH, and failure to make tax payments are grounds for Pagcor to revoke the license of Pogo firms.
Benavidez disclosed that if the FNs have paid the necessary premiums from the SSS, PhilHealth and Pag-IBIG, they should be able to avail themselves of the benefits from these social welfare agencies.
Language barrier
Yet another challenge for FNs in the Pogo industry, particularly Chinese, in accessing social welfare services is their low fluency in speaking in Filipino or English, which are used as the medium of instruction in the country.
Tutay said there are now proposals to address this by translating the country’s policies to other languages to help FNs understand them.
“We made this suggestion so that they [FNs] will not be fooled…. This is one of the ways we are considering as a way forward on the issue,” Tutay said.
Yet another option they are now considering, Tutay said, is providing post-arrival seminars to FNs to orient them about local laws and Filipino culture.
“This will probably help in lessening the misunderstanding or miscommunication between foreigners and Filipinos,” she added.
The inability of FNs to use the languages being used in the country also limits their ability to seek intervention from the DOLE’s attached agencies like the National Conciliation and Mediation Board (NCMB).
The NCMB said it has yet to process a case wherein the complainant is a foreign national.
There have been reports that some Chinese nationals who are Pogo employees suffered illegal recruitment and contract violations upon working in the country.
Even the country’s labor groups and migrant advocates acknowledge the vulnerabilities of FNs and called on the government to ensure their rights are also protected.
“The DOLE should have its inspection in Pogo bases of operations in order to ensure local labor laws are being followed, as well as other laws protecting the labor rights of foreign nationals working in the gaming industry,” Partido Manggagawa chairman Renato Magtubo said.
Other options
Migrant advocate Kabalikat ng Migranteng Pilipino Inc. (Kampi) noted that FNs tend to have few options on where to seek aid in the country.
“I think their natural recourse is to go to their embassy or if there are existing NGOs [nongovernment organizations] serving the locals. For example, the Chinese. I don’t know if there are such NGOs in the country,” Kampi president Luther Calderon said.
He explained that Kampi itself cannot provide assistance to the Chinese nationals since their mandate is limited to Filipino migrant workers.
The Bureau of Immigration (BI) affirmed the position of Calderon that it is mainly the concern of the Chinese embassy, which handles the affairs of its FNs, especially those who face deportation.
BI special prosecutor and visa hearing officer Gemma de la Cruz cited their experience in the deportation of some of the 8,000 Chinese nationals this year due to violations of Bureau of Internal Revenue (BIR) and Pagcor requirements.
“Once we get the information, that they [Chinese nationals] committed immigration violations, we immediately coordinate with the Chinese embassy for their immediate deportation,” dela Cruz said.
She said this is a good thing since concerned Chinese nationals are immediately deported by the Chinese embassy at its own expense, thus preventing congestion within the BI’s detention centers.
Institutionalized process
DOLE said if there is one good thing that came out from the surge of FNs in the country in the last three years, it is that it had helped institutionalize the country’s policy framework in accepting expatriate workers.
Tutay said they are looking at the country’s own model in its deployment of overseas Filipino workers (OFW) as it seeks to improve its processing of FNs.
This, she said, may include allowing DOLE-licensed Private Employment Agencies (PEA) to facilitate the recruitment of FNs.
“This will ensure foreign nationals will go through proper channels to work in the Philippines and would be hired…. The recruitment agencies will be able to facilitate their entry and verify if their employment is legitimate,” Tutay explained.
This will make PEAs accountable for the welfare of FNs, she added.
“We are currently reviewing the guidelines on the private recruitment agencies for local employment and we might consider [such] since there is no prohibition actually in existing laws for this,” Tutay said.
Pros and cons
Aside from prompting the standardization of FN employment policies, the Pogo industry also helped provide economic benefits to the country, Tutay said. This was not only through collected taxes, which the DOF said already reached P356 million as of last August, but also through its “indirect” contributions.
She said this became apparent with the employment growth in specific industries like real estate, wholesale and retail, accommodation and food, which were indirectly benefited by the increase in the number of FNs who have a lot of disposable income.
BLE said FNs usually earn between P20,000 and P40,000, excluding their other benefits.
“The said industries [affected by Pogo] have a big contribution when it comes to the net employment of the country as shown in the July 2019 labor force survey,” Tutay said.
Citing another benefit, she said local Filipino workers employed in the industry were also exposed to new technologies and systems used in Pogo operations.
Magtubo also acknowledged the advantages brought about by the Pogo industry, but he noted it should be only a temporary source of economic growth in the country since it is mainly reliant on gambling.
The labor leader noted the country should use revenues collected from Pogos and divert these to other industries that will provide sustainable economic growth to the country, such as manufacturing and the agriculture sector.
Transition process
Tutay said the government is aware of the risks arising from the sudden disappearance or decline of the Pogo industry.
The more immediate impact of such development is the displacement of 20,956 Filipino workers employed by the industry.
DOLE, however, projects these workers could immediately find new employment with their work experience from Pogos.
“They could still go back to the usual IT-BPM [information technology-business process management] sector. Or even other segments of the services sector, such as hotels and restaurants, since most of them deal with administrative work,” Tutay said.
She reiterated Magtubo’s position that the best preparation for the possible phaseout of Pogos is for the government to help expand other industries.
“This will result in more jobs in the country, which could replace the Pogo industry,” Tutay said.
Meantime, however, the Pogo sector is here to stay, and it’s just as well that the various regulators were able to manage the phenomenon in a timely fashion through an interagency approach that has tackled the revenue, immigration and social-welfare issues all at the same time.
Image credits: Ruletekka | Dreamstime.com, Quicksilver77 | Dreamstime.com