“Drug money is the source of POGO money.”
Sta. Rosa Representative Dan Fernandez on September 4 gave this blunt summary of the tangled skeins of offshore gaming hubs that Philippine lawmakers have been trying to unravel.
Four years of legislative probes into offshore gaming hubs have spawned surreal narratives:
As lawmakers in the capital hack at layers of POGO-linked corruption, thousands of cops in Davao City search for another fugitive, Apollo Quiboloy, the self-proclaimed son of God accused of the sexual abuse of women and minors, human trafficking, and money laundering. Police officials, quiescent for decades, say that Quiboloy’s 30-hectare complex hosts an underground labyrinth; a private taxiway leads to the Davao International Airport.
Welcome to the portals of Rodrigo Duterte’s black holes.
Davao, Central Luzon, Cebu, Metro Manila — the cities and regions where POGOs thrived were also epicenters of a “drug war” that killed thousands of Filipinos over decades.
As mayor of Davao City and president of the country, Duterte oversaw an army of killers.
He was the commander-in-chief of executioners and their unaccountable intelligence honcho. When he rattled off the names of local chief executives, businessmen, and foreigners, they faced three options: death, flight, or turn over everything.
The similarities in the conduct of the drug war, the Davao church, and the transformation of POGOs into criminal empires are striking.
Killers in uniforms and their vigilante cohorts hopped from one province to another, rewarded for kills and pressured to meet quotas.
POGOs shuffled managers and trafficked workers who were beaten up if they failed to meet digital scam quotas.
The believers who fed Quiboloy’s coffers chafed “donation” quotas across the Philippines and other countries to avoid torture and public humiliation.
Billions of dollars flowed in and out of these profit centers through cash transactions, poorly regulated remittance avenues, and non-compliant banks.
At the center of this apex of violence sat Duterte, who hammered critics to safeguard friends.
Illegal gambling and narcotics money partly sustained drug war killings. Exempt from the dirty war were Duterte’s friends and fat cats who cut deals with the regime.
Among those who danced away: the minders of huge narcotics shipments that landed in the national capital, and snaked out to Mindanao and central Visayan islands, before returning to Luzon.
Just months after Duterte stepped down, almost a ton of shabu was found in Tondo, in premises frequented by a Philippine National Police (PNP) Drug Enforcement Group officer. Other anti-drug operations in 2022 and 2023, mostly in Pampanga, bagged a total haul worth P7.5 billion.
Retired, dismissed, and active police have told the quad committee House of Representatives probe that Duterte’s actions actually strengthened the country’s drug woes.
He also rolled out the red carpet for POGOs as the drug war took off, crowing about an economic bonanza.
Barely eight years later, the Philippines features in a transnational crime web extending from Asia to western continents.
Alarm bells rang early. Finance officials in 2017 warned that POGOs were becoming a money-laundering paradise, with anonymous users and service providers (SPs) that fell between the cracks of state regulation.
From 2017 to 2019, the Anti-Money Laundering Council (AMLC) monitored P14 billion worth of suspicious transactions in the sector, including the SPs.
Yet, as late as 2020, with dozens of abductions and killings and an AML risk assessment linking POGOs to drugs, Duterte insisted the industry was “clean.”
As the COVID-19 pandemic and government’s draconian containment strategy dampened street sales in drugs, mobility curbs masked POGO networks’ cybercrime expansion and preparation for the coming narcotics trade resurgence.
Pre- and post-pandemic, self-confessed enforcers of the Davao Death Squad tagged Duterte’s economic adviser, the Chinese national Michael Yang, as an important player in a drug cartel.
When Yang hogged headlines as the Senate broke open the Pharmally scandal, Duterte defended him as a helpful “paymaster” of Chinese investors in the Philippines.
The Cambridge Dictionary has a very clear definition of paymaster: “a person of an organization that pays for something to happen and therefore has or expects to have some control over it.”
Yang helped Pharmally, a new firm with little capital and incorporators with fictitious addresses, bag P8 billion in pandemic contracts.
That’s almost a mirror of the 10-year, P6-billion POGO revenue audit contract awarded to a firm with a fake capital claim certificate.
Yang’s name has popped up anew as lawmakers track the Central Luzon narcotics and cybercrime networks.
Yang’s brother, Hong Jiang Yang, had P3.3 billion worth of transactions with Guo.
A Pharmally incorporator’s other firms link to Empire 999, which owned a warehouse in Mexico, Pampanga, that held more than 500 kilograms of shabu. The firm’s majority shareholder, who has fled the country, is a Chinese national who used a fraudulently acquired late-registration birth certificate to acquire land — just like the ousted Bamban mayor did.
Duterte used to yammer about local thugs of Mexico’s Sinaloa cartel in justifying his heavy-fisted tactics. The exposed POGO estates could fit right in with cartel headquarters in Central America.
Without Duterte, there would not be Bamban or Porac crime hubs, no sex and torture dens in Pasay, Makati, and Cavite.
Six years of tyranny had one overarching goal: instill a climate of fear to stifle dissent and discourage inquiries into the contradictions of his drug-war policies and actions.
Among the many Filipinos in and out of government who now rail at POGOs are those who once gave Duterte a free pass. Let’s not forget that. – Rappler.com
