Illicit Capital & Labor Inflows: Chinese Online Gambling in the Philippines
The Philippines has recently experienced a surge in Chinese foreign direct investment (FDI) and labor. Domestic mobilization alongside changing economic structures explain the surge of online gambling. Rodrigo Duterte’s government changed the rules regarding online gambling investments in the Philippines, dissolving a domestic firm’s monopoly of the industry and allowing the Chinese online gambling firms to invest. As of 2018, there are 58 online gambling firms in the Philippines alongside more than 200 service providers who import massive amounts of Chinese labor.
Belt and Road indirectly assisted online gambling. Positive relations between Chinese and the Philippines led to an increase of Chinese tourists from hundreds of thousands during Aquino to an average of a million per year during Duterte. Legal tourist routes have become one of the many pathways that would-be online gambling workers use to get into the Philippines. Similarly, strong relations between the Philippines and China led to an increase in FDI, which has become part of online gambling’s commodity-chain complex, ranging from real estate, business and leasing, and services are on the rise too.
Online gambling firms find Philippines real estate affordable compared to that of other Southeast Asian states. Due to real estate demand, these firms have become one of the biggest customers of Filipino oligarchs. Ayala Land’s international sales shot up by 32 percent, accounting for 34 percent of the entire company’s US$2.2 billion sales in 2017. That same year, Chinese nationals accounted for more than 10 percent of SM Prime Holdings’ international sales, up from 5 percent from 2016. The demand increased not only in Metro Manila, but also expanded to Antipolo, Tagaytay, Cebu, Olongapo, and other cities.
After acquiring the buildings, these firms needed Mandarin-speaking workers to communicate with customers. As a result, PRC citizens are employed because of their ability to speak the language. A far smaller number of Malaysian and Indonesian Chinese are also hired for their proficiency in other Chinese languages. Filipino workers become building administrators, security staff, and game dealers. The marketing division targets the Chinese populations across the world through email and regular mail, in order to induce them into playing. A gaming division made up of the Chinese workers who pretend to be players entice actual players into additional play. A technology division creates new apps and websites to limit disruption in the event of Chinese government interference. Filipino staff members are used to policing the online gambling workers.
Online gambling workers also face increasing animosity from Filipinos, who have also been indirectly affected by online gambling firms, due to the rise of real estate property prices and “Chinese-only establishments” that alienate the population. Labor abuse has been rampant across these firms, leading to suicide incidences across Metro Manila. In an interview with an online gambling worker, we found that:
We work six times a week, around 12 hours a day. Our salaries are fixed for those 12 hours, but we can get paid more especially when there is a demand for overtime. Some workers also need to work every day since they borrowed money from the company to pay for some expenses in China. There are also penalties on our salary if we break the rules, such as getting in trouble with the locals or the police, traveling to other provinces or cities outside Metro Manila, or bringing locals to the office. It is very difficult since we have to be up at four or five in the morning to get ready for the six a.m. shift.
While the government claims that there are only 110,000 Chinese laborers in the country, others note that the number of Chinese laborers including the semi- and illegal workers can actually reach 400,000. Workers also face increasing scrutiny from the Philippine government. Indeed, Philippine government agencies reportedly have even been actively involved in smuggling workers in the country. The Bureau of Immigration colludes with Philippine Amusement and Gaming Corporation (PAGCOR) to sell licenses to undocumented Chinese workers brought by tour companies. While PAGCOR facilities the firms, BI officials bring in the workers. A new rent-seeking model was created by officials in PAGCOR and BI to enable illegal immigration allowing workers to bypass passport control and acquire fake working permits or identification.
In sum, the online gambling sector causes a rampant abuse of Chinese migrant workers and generates severe adverse impacts on Filipinos. As for now, both governments are lack of effective measures to tackle thorny problems concerning illegal immigration, human trafficking, and other severe social issues caused by unbridled online gambling businesses. It is, however, expected that governments could act beyond the short-term economic returns and interest of the ruling party, and collaborate for better protection for workers and healthy and well-regulated economy.Alvin Camba is a Sociology Ph.D. Candidate in the Department of Sociology at Johns Hopkins University. He works on elite conflict or consolidation around new capital, illicit capital inflows, and the political economy of natural resources. His works can be found at alvincamba.com and for any feedback, please email [email protected]