As Philippine authorities intensify their crackdown on offshore gaming operators (Philippine offshore gaming operators, POGO) and related illegal activities, there have been successive reports of several Chinese nationals being involved in these cases.
Observers believe that the corruption issues of Philippine officials and the bribery of law enforcement officers by Chinese-funded businesses may make it difficult to eradicate these illegal practices in the short term. They worry that the CCP might use illegal offshore gaming operators in the Philippines to conduct espionage activities, further exacerbating tensions in Sino-Philippine relations.
Chinese Nationals Venture into POGO and Other Illegal Activities, Facing Strict Crackdown in the Philippines
A recent incident involving a 14-year-old Chinese student in the Philippines who was kidnapped and had his fingers cut off by a criminal gang, and the murder of his driver, has drawn significant local attention. Gilbert Cruz, the executive director of the Presidential Anti-Organized Crime Commission (PAOCC), told the media on March 2 that the perpetrators of the kidnapping are allegedly part of a "violent gang" associated with illegal offshore gaming operators (POGO).
The Philippine police earlier stated that the Chinese fugitive Wang Dan Yu, also known as Bao Long, suspected of kidnapping the Chinese student, is now wanted for multiple charges including murder, carjacking, and kidnapping for ransom.
In addition to this violent crime involving personnel related to offshore gaming operators, Philippine authorities are also continuously cracking down on the operations of illegal offshore gaming operators.
Last week, Joel Anthony Viado, the director of the Bureau of Immigration (BI), reported that 98 Chinese citizens were suspected of illegal POGO operations. They were deported back to Beijing on flights arranged through the Chinese embassy.
Viado stated that since January, over 500 foreigners related to illegal POGO activities have been arrested in independent operations in Pasay City, Parañaque City, and Cavite, with a total of 226 people being deported. He said, "This clearly shows that the Philippines will not become a haven for illegal activities."
In light of the recent series of actions by the Philippines, Dindo Manhit, director of the Philippine think tank Stratbase ADR Institute, told Voice of America that this shows Manila has had enough of POGO becoming a hotbed of crime, thus expanding the crackdown.
Manhit told Voice of America: "Because of this issue, our government's policy is to terminate the presence of POGO in our country. It has led to many illegal activities and scams, even expanding many so-called criminal activities of Chinese citizens. Although they enter the country as tourists, they end up staying illegally for a longer time. This is very serious and aggressive."
Although POGO was legalized and rapidly developed during the tenure of former Philippine President Rodrigo Duterte, the current President Ferdinand Marcos Jr. overturned this policy last year and criticized online gaming companies for engaging in "activities unrelated to gambling." Marcos demanded all POGO operators to close their companies and lay off foreign staff by the end of last year.
POGO Goes Underground
Even though POGO has been explicitly listed as illegal by the Philippine government, many Chinese continue to engage in related activities locally.
Aaron Jed Rabena, a researcher at the Manila-based think tank Asia Pacific Pathways to Progress, explained this phenomenon in an interview with Voice of America.
He said: "Because they think that these groups can act with impunity. They think they might still be able to bribe the authorities, so they are really greedy. They think they can continue to operate illegally. So they are really taking risks."
Manhit also said that since December last year, the Philippine authorities have expanded their operations, severely cracking down on POGO and other illegal activities, making the operations of criminals more covert in an attempt to evade law enforcement surveillance, which makes the crackdown more complicated.
He said: "Of course, the government's serious approach has forced them to turn to underground activities. So I think this is what we are currently seeing. However, although these illegal activities have gone underground, I believe the government continues to actively pursue them."
However, a person familiar with the matter, who chose to remain anonymous due to the sensitivity of the issue and who had served as an assistant to the president of a Chinese-funded POGO company in Manila for several years, believes that the Philippine government's current actions are "just for show." He thinks that while the Philippine government publicly states that POGO is banned, it has not strictly enforced the ban, leaving some gray areas that allow some operators to continue their operations.
This person said: "(The government) can't really stop this thing from happening here 100% because they would lose 100% of their customers. They (the Philippines) are just putting on a show, on one hand, the government needs it, so these people can stay, on the other hand, they (POGO) don't need to leave, because they won't be investigated, they only catch the surface, it's not really that serious."
Philippine Officials Extorting Chinese-funded POGO Operators Using the Ban?
This anonymous person stated that the POGO companies that were investigated or left, "either really did something detrimental to the government, such as not paying taxes legally, or not paying 'protection fees' legally." In other words, those POGO operators who pay "protection fees" on time can still operate safely in the Philippines.
But this person said that the "protection fee" is not included in the fees for applying to operate as POGO in the Philippines, meaning that this fee item is not officially stipulated, "but as long as you operate there, you have to pay a XXX fee based on the floor space and the number of your employees, and this fee is like the protection fee of the underworld."
This person also said that based on previous experience, regardless of the size of the POGO, the monthly "protection fee" could amount to millions to tens of millions of Philippine pesos. However, since most POGOs are Chinese-funded, China's continued crackdown on cross-border gambling crimes has significantly affected POGO operations, and small companies basically cannot afford it.
"So now those who stay there are big companies, and basically, those who can stay there must have close cooperation with the (Philippine) government," this person said.
He further stated that now that the Philippines has enacted these regulations, announcing that those holding POGO licenses are operating illegally locally, they can then blatantly ask the police or law enforcement officers to "use private punishment" to extort an unspecified amount of "protection fee" from POGO operators. He said, as long as the amount is large enough, they can still operate, otherwise, it's not just that they can't operate POGO, but their entire fortune might be plundered, and some Chinese-funded POGO operators might have to try to bribe the police.
This person believes that while the Philippine government seems to be directing public opinion towards Chinese-related criminal gangs affecting local security, the real problem might actually be the corruption of government officials and police. He said: "It looks like it's the Chinese making the place unsafe, but if you really want to get to the bottom of it, it's the Philippine government causing trouble, because which country's police can use private punishment to rob? Our company has been held at gunpoint by the police, who then said 'hand over everything you have.' They target a building, which might contain dozens or hundreds of companies, they just rob them all, anyway, it's up to your own ability (referring to how much protection fee you have), if you don't have the ability, be prepared to be robbed, if you have the ability, you'll be safe."
The authenticity of this person's statements cannot be independently verified, and inquiries and requests for comments have been made through phone calls and emails to the Presidential Anti-Organized Crime Commission, the Philippine Amusement and Gaming Corporation (PAGCOR), which is responsible for issuing licenses and regulating national gambling institutions, and Philippine senators Sherwin Gatchalian and Risa Hontiveros, who have long been concerned about POGO-related criminal activities, but no responses have been received.
Observers: The CCP Might Use Illegal POGO for Espionage Activities, Damaging Sino-Philippine Relations
This person said that although the Philippine government seems to be strongly cracking down on POGO, because there are still profitable opportunities locally, this industry will not completely disappear.
He said: "Even if it disappears on the surface, it will just change its name and let these people continue to operate, because if this industry is completely eradicated, the related losses will be too great."
However, Manhit, the director of the Institute for Strategic and International Studies, does not agree with this person's statement. He stated that although it is indeed possible that grassroots police officers may solicit bribes from POGO operators without the government's knowledge, the large-scale crackdown launched by Manila since last year reflects the government's intention to thoroughly crack down on POGO. This is because, at a time when there are sovereignty disputes in the South China Sea between the Philippines and China, the government has discovered that POGOs, which are mainly Chinese-funded, not only give rise to fraud or human trafficking and other criminal activities, but may also be used by China as a tool to influence the Philippines, threatening the country's national security.
Manhit said: "Especially when you see some POGOs near Philippine military bases, because military bases are usually located in remote areas, this might be why those areas need POGO. We all know how powerful the People's Republic of China is, how could they possibly not know about the existence of these groups? Whether they allow these groups to enter the Philippines to cover up their espionage activities or malicious influence? Therefore, this will continue to put pressure on us, if this is indeed the economic activity these Chinese citizens are engaged in."
Meanwhile, Claire Castro, the spokesperson for the Philippine Presidential Office, stated on March 3 that four Chinese nationals were accused of engaging in espionage activities, and the Philippine authorities will investigate whether the donations led by their organizations were made in good faith.
Chester Cabalza, chairman of the International Development and Security Cooperation Organization (IDSC) in Manila, warned in a written interview with Voice of America that if crimes related to Chinese nationals continue to occur in the Philippines, the already tense relations between the two countries due to maritime conflicts may rapidly deteriorate.
Cabalza said: "These social issues exacerbate the unresolved territorial disputes between China and the Philippines, further disrupting the already challenging bilateral relations and making it more difficult for both sides to repair friendship and diplomatic efforts."
