PhilWeb: Ongpin resigned to ‘save the company’

PHILWEB Corp., the listed gaming technology company that has become the focus of attention following President Duterte’s anti-oligarch and anti-online gambling pronouncements, has issued a statement on the resignation of its chairman, Roberto V. Ongpin as the company’s shares fell.

“The main reason why Mr. Ongpin resigned from PhilWeb is to save the company. He recognized that if he stayed on, PhilWeb’s eGames outlets could be shut down, which would lead to the loss of its business and eventual closure, affecting more than 5,000 employees,” PhilWeb president Dennis Valdes said in a disclosure to the Philippine Stock Exchange.

PhilWeb has been a service provider to PAGCOR in the management of its e-Games network for the past fourteen years.

During this period, the company remitted over P14 billion to PAGCOR. In 2015, PhilWeb remitted over P2.1 billion to the gaming regulator and also paid over P280 million in corporate income tax, VAT and other taxes, the statement read.

Taking exception to the perception that the company is into online gaming, Valdes stressed that “PAGCOR e-Games is not online gaming.” He added that it cannot be accessed by an office or home computer. “It is a private, members-only network of clubs where players need to be physically present in order to play. Access to these clubs is strictly controlled such that it is only open to members who are over 21 years old and are financially capable of gaming,” he said. Each PAGCOR e-Games site conforms to location restrictions put forth by both PAGCOR and the local government unit in which it is based. To date, there are 286 PAGCOR e-Games locations nationwide, with over 5,000 employees.

Valdes pointed out that if PhilWeb’s contract with PAGCOR is cancelled or not renewed, the company’s license to operate immediately stops, leading to the shutdown of its operations as well as of the 286 e-Games outlets, each of which is operated by a PAGCOR licensee who is generally well connected in the local community.

This would also mean that PAGCOR would not receive the average P6 million per day that is their share of e-Games revenue, said Valdes. This revenue, estimated at over P2.1 billion annually, comes at no cost to PAGCOR, he stressed. This same revenue is used by PAGCOR to fund its propoor programs, especially the new programs of the current administration.

Another immediate effect of PhilWeb’s possible closure is that over 5,000 employees will lose their jobs and all suppliers of eGames, mostly SMEs that supply goods and services to each e-Games outlet, would also suffer from the shutdown.

Also expected to be adversely affected are over 1,500 stockholders who are owners of the company. These stockholders include foreign funds. “The sudden closure of a publicly listed company may cause serious concerns to foreign investors,” Valdes pointed out.

Government would also lose out with PhilWeb’s possible closure. The BIR would not receive over P280 million annually, which represents the company’s corporate income tax, VAT, and other taxes.

Finally, PhilWeb’s beneficiaries under their Corporate Social Responsibility programs would no longer receive anything, again leading to more displacement, said Valdes.

“There are enormous long-term economic and financial considerations that Mr. Ongpin took into consideration when he resigned from PhilWeb, which the government should also look at closely at it decides on the company’s fate,” Valdes concluded. (PR)