The Philippines’ Commission on Audit (COA) has revealed that gaming regulator PAGCOR is yet to collect Php2.33 billion (US$42.6 million) in income from Philippines Offshore Gaming Operators (POGOs) more than a year after the amount fell due.
According to a report from the Inquirer, COA informed PAGCOR of the results of its 2021 audit via a management letter on 13 June, with the outstanding amount comprising a significant chunk of the Php2.97 billion (US$54.3 million) that had been outstanding as of 31 December 2021.
“Out of the Php2.328 billion accounts receivables outstanding for over 360 days, Php815.902 million is under protest. Notwithstanding the accounts receivables under protest, the remaining Php1.512 billion was uncollected for more than one to five years,” the COA said. This amount, it added, could have been utilized as part of PAGCOR’s contribution to nation-building.
“The presence of substantial accounts receivable from POGOs has been a persistent issue for several years,” COA said.
In response, PAGCOR explained that a number of POGOS had protested the amounts being billed by the regulator from 2018 onwards, which had been based on GGR estimates provided by a third-party auditor.
“The affected POGOs, due to the substantial amount of the regulatory fees, filed protest letters on various dates from May 2018 to October 2019. Some of the affected POGOs partially paid while some did not pay the billed amount, hence, resulted to the outstanding balances,” PAGCOR said.
However, it has since admitted that the billed amounts were found to be inaccurate because the third-party auditor “failed to establish a clear linkage between the suspected undeclared websites and POGOs.”
COA has asked PAGCOR to adjust its books to reflect the correct accounts receivable, and to revisit its processes for collecting fees.
The number of POGOS operating in the Philippines has plummeted from a peak of 63 in 2019 to just 26 operational POGOs as of late April 2022. PAGCOR recently told IAG that it had cancelled 22 POGO licenses outright, primarily due to the effects of the COVID-19 pandemic.
Among the prime factors cited by the gaming regulator driving the industry contraction were the complete shutdown of operations from 21 March 2020 until 31 May 2020, an exodus of POGOs’ foreign employees “in fear of discrimination when availing of health services in case they contract the COVID-19 virus”, a total ban on the entry of POGO foreign workers into the country, and limitations on the operational capacities of service providers pursuant to the imposed quarantine classifications.
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