SUBIC BAY FREEPORT – The Bureau of Internal Revenue (BIR) padlocked this morning (July 14) the warehouses of two cigarette manufacturing companies here for illegal activities uncovered under the agency’s Tax Compliance and Verification Drive (TCVD).

            No less than BIR Commissioner Romeo D. Lumagui, Jr. led the inspection of the warehouses where dozens of unregistered cigarette manufacturing equipment, as well as cigarette packing and raw materials were found.

            “Na-confirm natin na hindi rehistrado lahat ng makina ng dalawang kumpanyang ito at hindi rin rehistrado ang mga brands na ito,” Lumagui said clarifying that the non-registration is a violation that could draw not only fines, penalties and seizure but imprisonment as well.

            According to the TCVD mission order issued by OIC BIR Regional Director Emmanuel S. Ferrer, Jr., the two companies maintaining the now padlocked warehouses are OneSubic Premier Manufacturing Corporation (OPMC) and Hongcim International Corporation (HIC), sister companies operated by the same group of owners whose names are yet to be released.

            The country is losing around P100 B yearly in taxes due to the unscrupulous practices of manufacturers in the cigarette industry alone, according to Lumagui, denying government much needed funds that could help provide services to the public.

            He said the BIR has been receiving reports that cigarette brands supposedly made for the international market, such as those found at the OPMC and HIC warehouses, namely RGD, Baisha, Liqun, Saat, Furongwang, Nanjing, Shuangxi, Brustun, Azalea and Chunghwa find their way in the local market, skipping the payment of excise tax and other fees.

            Subic Bay News tried to get a reaction on the closures from Chairman and Administrator Jonathan D. Tan of the Subic Bay Metropolitan Authority (SBMA) which administers the Subic Bay Freeport but he has yet to respond as of this writing.

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A Philippines Offshore Gaming Operator (POGO) inside the Subic Bay Freeport Zone (SBFZ) is in hot water after it refused entry to the Inspection Team sent by the Subic Bay Metropolitan Authority (SBMA) over the weekend to conduct inspections to ascertain compliance to the Enhanced Community Quarantine (ECQ), and if it ceased operations as ordered in the face of the Wuhan Virus (Covid 19) Pandemic.

“Ekxinum, Inc. told us to make an appointment first before coming for inspection,” team member SBMA Fire & Rescue Chief Ranny Magno said, “which is not right because inspections are supposed to be random.”

This prompted SBMA Chairman & Administrator Wilma T. Eisma to order the SBMA Business and Investment Group (BIG) to work with the Legal Department “in issuing a ‘show cause’ order for Ekxinum to explain why it barred the SBMA inspection team from entering its premises.”

According to Eisma, “other legal action may ensue from this procedure, if warranted. The random inspection of Ekxinum facilities and all other POGOs will take place in the same way the SBMA has made random inspection of all other establishments.”

Except for Ekxinum, Inc., other POGO centers and businesses in the Freeport allows the SBMA Team to enter and inspect their premises.

POGO Operations During Quarantine

Earlier, there had been suspicions of possible continued operations of the POGOs despite the government’s order to stop, which not only raises the risk of spreading the Wuhan Virus, but would also be cheating the government of taxes.

Like Ekxinum, hotels in the Freeport that are exclusively housing Chinese POGO employees like Buma Hotel and Inter-Park Hotel could have easily continued operations right from their rooms without getting the attention of authorities.

Passenger buses from the said hotels marked “Food Delivery Do Not Delay” and “Food and Basic Needs Service” have also raised suspicions that they are transporting workers to POGO Centers within and outside the Freeport, thus, Eisma ordered stricter measures in monitoring the trips, and “if caught,” she said, “will be dealt with accordingly.”

Internet Signal

Meanwhile, a former top telco executive told Subic Bay News that “telcos are now enabled by “Software Defined Networks (SDN), meaning they have intelligent monitoring systems to better manage their fixed and wireless networks.”

“SDN can measure real time usage of bandwidth,” said the executive who requested not to be named, “per port and/or per customer, among other metrics, that is, peak time/lean time, usage patterns, fiber cuts and outages, etc.”

Eisma said she has ordered the SBMA Legal Department to coordinate with the PLDT in looking into the “usage of bandwidth capacities” of the POGOs in Subic.

BIR Tax Payment Certification

Ekxinum, Inc. is the biggest POGO in the Subic Freeport that employs thousands of Chinese at the sprawling some 3.6-hectare former school compound turned Online Gambling Center at Upper Cubi which another company, Premium Technical Training and Facilities, Inc. that is also owned mainly by Ekxinum owners, leased from SBMA in 2017 and subleased to its sister POGO company.

Eisma has informed POGO companies in the Freeport that should the national government give the go signal for POGOs to resume operations, they will have to submit certifications from the Bureau of Internal Revenue (BIR) that they have paid all taxes due as of March 2020, as announced by PAGGOR Chair Andrea Domingo, otherwise they will not be allowed.

Earlier, the BIR has said “almost all POGOs” have unpaid taxes.

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