dannybuntu on Nostr: Federalism and the Risk of Invasive Foreign Presence in the Philippines: The Case of ...

Federalism and the Risk of Invasive Foreign Presence in the Philippines: The Case of POGOs and Property Ownership

Federalism has long been a polarizing proposition in the Philippine political landscape. Advocated by former President Rodrigo Duterte during his campaign and throughout his administration, federalism was framed as a structural reform to decentralize power, promote regional development, and empower local governments. However, embedded within the proposed shift was an agenda to amend the 1987 Constitution—specifically, provisions that restrict foreign ownership of land and corporations. While such reforms were often marketed as economic liberalization, they also carried significant national security implications, particularly in the context of increasing Chinese economic presence in the country.

One notable development during Duterte’s term was the proliferation of Philippine Offshore Gaming Operators (POGOs), many of which were owned or managed by Chinese nationals. These entities quickly expanded across Metro Manila and other regions, occupying commercial and residential properties and employing tens of thousands of foreign workers. The rise of POGOs was seen by some analysts as a proxy for a broader Chinese economic and possibly geopolitical footprint in the Philippines.

Had constitutional amendments favoring federalism succeeded—particularly those that relaxed restrictions on foreign ownership of land and critical industries—it is plausible that POGOs and similar foreign entities could have transitioned from tenants to landowners, securing permanent footholds in Philippine real estate and corporate sectors. This scenario, had it fully materialized, would have complicated efforts to regulate or expel these entities, especially amid mounting concerns of espionage, tax evasion, and criminal activity linked to some POGOs. The eventual crackdown on POGOs and the exposure of controversial figures such as Bamban Mayor Alice Guo underscore the depth and sensitivity of this issue.

In this light, the failure to implement federalism during the Duterte administration, and the continued suspension of such reforms under the current administration, arguably averted a deeper and more irreversible form of foreign economic entrenchment. The Marcos administration’s ban on POGOs can be viewed as a corrective measure that reasserted state control over sectors that had grown vulnerable to foreign manipulation.

A comparative example can be seen in Japan, where the government is currently grappling with the "Akiya phenomenon"—an estimated 9 million abandoned homes. Due to lenient property laws that allow foreigners to purchase real estate, Chinese nationals have reportedly been buying properties in large numbers. While Japan has been quicker to legislate restrictions in response, the Philippines' case highlights how constitutional safeguards play a critical role in preventing potentially exploitative foreign acquisition of national assets.

The intersection of constitutional reform, foreign ownership, and national security is thus a crucial area of concern in any federalism discourse in the Philippines. While the promise of federalism may hold developmental allure, its implications for sovereignty and strategic autonomy demand vigilant scrutiny.