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MANILA, Philippines — Criminal gangs operating online fraud farms in the Philippines are shrinking their operations and changing their tactics to avoid a sweeping crackdown, officials said Tuesday.
Philippine President Ferdinand “Bongbong” Marcos Jr announced in July a total ban on so-called Philippine offshore gaming operators, or POGOs, by the end of 2024. Manila says the operators are used as fronts by organized crime gangs for human trafficking, money laundering, cyber fraud, kidnapping and even murder.
Deputy Attorney General Felix Nicholas Ty said the government’s raids were continuing as scammers continued to traffic foreign and local workers into selling fake investment schemes to clients around the world.
But they no longer operate in large complexes or office buildings in major cities, but have relocated to less conspicuous buildings in the provinces.
“The modus operandi for these operations right now is guerrilla-style, small-scale operations in resorts and even residential areas,” Tay told a security forum, adding that some operations have also switched to using less-than-“top-tier” hardware”.
“We are seeing an evolution from large-scale actions to small-scale actions,” agreed Senator Sherwin Gatchalian, who spoke at the forum.
Gatchalian said the scam farms also use other guise, including a recent raid on a business process outsourcing agency that was posing as a business process outsourcing agency but was found to be running “scam software”.
Tai said that while there were signs that “their resources are dwindling”, scam operators “are still very entrenched” and that, with limited government resources and manpower, “it’s unrealistic for us to catch them all.
Benedict Hoffmann, deputy regional representative of the United Nations Office on Drugs and Crime, told UN News earlier this year that Southeast Asia, including the Philippines, is “the epicentre of the global fraud industry.
The scammers target millions of victims around the world and rake in as much as $64 billion a year, the U.S. Institute of Peace, a Washington-based think tank, said in a May 2024 report.
“These criminal groups are mainly from mainland China and they started out in the online gambling space” before moving on to more lucrative scams, lead author Jason Toll told the Manila forum.
The industry employs an estimated 500,000 workers, 15,000 of them in the Philippines, who are recruited mainly through social media and then forced to work in scams and face torture if they fail to meet quotas.
The largest fraud gang is said to be located in Myanmar, with 120,000 members.
Tai said the groups had invested “significant sunk costs” in their operations in the Philippines and might want to recoup some of that.