Philippines economic zone chief responds to presidential criticism

News on 24 Dec 2016

Following critical comments made by Philippines president Rodrigo Duterte Thursday, the head of the Philippine Economic Zone Authority (PEZA), Charito Plaza felt obliged to defend her organisation and personal integrity in a letter to the presidential palace Friday.

Earlier, Duterte had publicly implied in a speech that the head of PEZA had been bribed to issue online gambling licenses. The president reportedly said:

“The one who gets appointed to PEZA, he gets about P300 billion selling the umbrella-type of license. It’s good that I’ve learned about it.” He went on to reference the recent bribery accusations against fugitive Macau online gambling businessman Jack Lam (see previous reports), claiming that cases like this happened because of the weak leadership at PEZA.

In her response, Plaza wrote:

“May I be allowed to inform the President that online gaming or online gambling or any form of gambling operation is not registrable (sic) with PEZA and is not allowed by PEZA…. We have recognized and will continue to recognize that Pagcor has the sole and exclusive authority to grant franchises and regulate gambling operations in the country.”

PEZA also clarified that Clark Freeport Zone, where Lam was operating, is not administered by PEZA. “Rather it is administered by the Clark Development Corporation, which is under the Bases Conversion and Development Authority.”

Plaza said her agency has never registered any online gaming or online gambling activity and has never included online gambling as an activity that can be registered with PEZA.

“We wish to assure the President that this policy of not registering online gaming or online gambling in PEZA will not change,” Plaza wrote after Duterte publicly vowed to look for an “honest man” to appoint to PEZA.

Duterte appointed Plaza as director general of PEZA in September this year. She is a former lawmaker and consultant to the Department of Interior and Local Government, Philippine National Police, and the Armed Forces of the Philippines.

In related news, Philippines Senator Joel Villanueva supported Duterte’s earlier call for an online gambling ban. In a social media post, Villanueva said he is supportive of the president’s call because “gambling promotes greediness.”

A Senate inquiry by the labour committee which Villanueva chairs has reported that the nation’s economic zones, created to generate jobs for Filipinos, are instead employing mostly foreign workers at lower rates, and there are no limits on the number of foreign workers who may be employed by firms operating in zones like the Clark Freeport and Cagayan.

The Senator noted that during a recent hearing by his committee the Clark Development Corp. (CDC) admitted it knew of more than 1,500 foreign workers for the firm Next Games, which was registered as a business process outsourcing firm but was actually a service provider for an online gambling company.

Only 11 Filipino workers are employed by Next Games, Villanueva said, observing:

“Not only do these operations promote gambling but they also take advantage of our economic zones. Weak regulations allow the illegal entry of foreign workers. Filipino workers do not benefit from these operations.”

Villanueva said that he intends to file a bill that requires companies in economic zones to reserve a minimum of 80 percent of the jobs created for Filipino workers.

”Ecozones are there to create jobs for Filipinos in exchange for tax incentives,” the Senator said. “However, it is currently being exploited by some locators who would bring in foreign workers, some of them illegal. I do not see any value in giving incentives to locators who do not hire Filipino workers.”

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