Escalation

It is nearly a given that tensions between the US and China will continue to escalate in the coming period. The pandemic merely hastens that process.

For his own electoral goals, Donald Trump assumed a hawkish stance against China and attempts to paint his rivals as soft on the emerging Asian power. Trump is laying the blame for the pandemic on China. Although he has not imposed any economic sanctions yet, his administration is tightening the screws on US companies exporting technology to the Asian power.

Australia’s right-wing government has joined the US chorus blaming China for the pandemic. Beijing reacted by imposing punitive tariffs on Australia’s barley exports.

Analysts look at the recent high-level meeting organized by the World Health Organization where a hundred countries called for an independent review of the outbreak that happened. This is not a review of China’s handling of the health crisis alone – something the US and Australia wanted. With the EU opposing to lay the blame on Beijing, analysts see this outcome as a diplomatic win for China.

Meanwhile, US naval forces continue to mount “freedom of navigation” patrols in areas of the South China Sea claimed by Beijing. The navies of the other Southeast Asian claimants have likewise increased their presence around the islets the Chinese built up into functional military facilities.

Vietnam, currently chair of the ASEAN, was trying its best to get a Code of Conduct between China and the other claimant countries signed this year. The lockdown due to the pandemic, however, delayed that schedule.

Hanoi seeks to capitalize on the ruling issued by the Permanent Court of Arbitration on a case filed by the Philippines. The Court ruled that China’s “9-dash line” that carves out much of the South China Sea (SCS) as Chinese territory is legally and historically invalid. Furthermore, the rocky features cannot be claimed as “islands.”

Vietnamese Prime Minister Nguyen Xuan Phuc, since his country assumed the chair of the regional grouping, tried to gather support among the ASEAN countries toward reducing China’s dominance over the contested waters. Vietnam claims some islands in the turbulent sea.

Vietnam and Malaysia, another claimant country, have focused their diplomatic efforts to bring the territorial issues to the UN. Both are strongly contesting China’s 2,000-kilometer “9-dash line” that arbitrarily annexes a huge portion of the SCS.

More than $3 trillion worth of goods transit through the SCS each year. The area claimed by the Philippines is estimated to hold an estimated $10.6 trillion in oil and gas. Retired justice Antonio Carpio says this resource alone could fuel the Chinese economy for 130 years.

In addition, the fisheries industry in the SCS is valued at about $15.8 billion. Economist Solita Monsod said that the soft loans and grants we may gain from our cooperation with China pales in comparison what we might otherwise gain from untrammeled access to the SCS fishing grounds.

The Philippines, Vietnam, Indonesia and Malaysia all complain that the Chinese fleet stationed in the maritime territory they claim has been harassing their fishing boats. Unless a Code of Conduct is forged among the claimant countries, tensions could only continue rising and skirmishes could happen.

Too, with China’s continuing emergence as a global power, any delay in forging this Code of Conduct could make it more difficult to the ASEAN countries to ensure an equitable arrangement in a vital sea.

NOGOs

As the situation normalizes and as industries such as online gaming resume operations, the legitimate Philippine Offshore Gaming Operators (POGOs) would want to distinguish themselves from the non-registered offshore gaming operations (NOGOs).

The legitimate operators have been allowed to gradually resume their operations subject to the usual health protocols and on the condition they settle all their tax obligations with the Philippine government. Because of the strict requirements for tax compliance, none of the POGOs registered with the Pagcor have truly resumed their businesses.

The Accredited Service Providers of Pagcor (ASAP), representing the legitimate online gaming operations, has been cooperating closely with the PNP and the NBI to crack down on their non-registered counterparts. These illegal online gaming operations give the industry a bad name.

ASAP spokesperson Margarita Gutierrez says the association created a task force to assist our law enforcers in tracking down illegal online gaming in the country. This cooperation resulted in the recent raid in Las Pinas City where 265 Chinese nationals were arrested. Similar raids were also conducted in Makati and Paranaque.

The duly registered POGOs claim to be faithfully obeying laws and regulations governing their operations, including the substantial taxes and fees imposed by government. Special attention is now being paid to the health-related protocols relating to the continuing pandemic.

ASAP sees itself as a functional partner of Pagcor in policing the online gaming industry. The partnership not only ensures that regulations are observed but also that tax obligations are duly complied with. The association thus works in partnership with the BIR as well. This will ensure thorough regulation of online gaming.

The sooner the NOGOs are tracked down and purged, the better it will be for the registered and compliant enterprises. It will likewise help improve the public’s appreciation of this highly lucrative sector.

The Philippine government tolerates online gaming without illusions. It is a rich source of revenues. At this time of great difficulty, the revenues will go a long way in helping other sections of the Philippine economy get back on its feet.

Better supervision of this activity will help reinforce public acceptance of this industry that will never want for moralizing critics.