Regulation on Philippine gaming industry sought as digital advocates cry foul

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A lawmaker plans to lodge a bill targeting the Philippines’ gaming industry as the government looks for ways to resolve the growing gaming addiction among children.

The Philippines has long sought to pass a legislation that will oversee the gaming industry as more people hop into the sector looking for new entertainment and extra cash needed to tackle inflation, with younger individuals vying for a regular profession in the field. But while several bills on the industry have made their way past the Philippine Congress in recent years, none succeeded in becoming a law.

Senator Sherwin Gatchalian is the latest lawmaker to table a regulation covering the gaming industry, a proposal that was met with heavy criticism from digital advocates.

Under Senate Bill No. 1063, also known as the Video and Online Games and Outdoor Media Regulation Act, Gatchalian seeks to curb video game consumption in the Philippines. The proposed legislation will give the Movie and Television Review and Classification Board (MTRCB), a quasi-judicial government agency reviewing and classifying television programs and movies in the Philippines, the power to ban video and online games that authorities deemed “unfit for consumption.”

Additionally, the distribution of video games would be tightly monitored, with sales of “Adults Only” games restricted among children. Local media outlet Manila Bulletin also reported that the printed packaging and digital copies of video games for sale in the market would need to display a rating label to help consumers identify which games are safe for minors.

But Digital Pinoys National Campaigner Ronald Gustilo said the proposed legislation is unnecessary and a waste of taxpayers’ money. Elaborating his statement, Gustilo said the international unit Entertainment Software Rating Body (ESRB) already has a content rating system in place and is being followed globally to filter and classify video games entering the market.

“Further classification and regulation of video games is totally unnecessary. The ESRB video game content rating system is already in place and has been proven to be effective in classifying and enforcing video games globally. We believe that the body is enough,” Gustilo remarked, adding that even without a law, the gaming industry consistently enforced the ESRB’s rating guidelines.

Gustilo, carrying the voice of digital advocates in the country, also pointed out the massive budget the government may need to utilize should the law be passed.

“Can the government still afford to take on another regulatory function while talking about right-sizing and rationalization within the government? Maybe it should focus its attention and resources in addressing the budget deficit rather than spending on unnecessary matters,” he said.

The Philippines has an estimated budget deficit of PHP833 billion ($14.23 billion) in the January to August period, a 13% decrease from PHP958 billion ($16.37 billion) recorded in the same period last year.

Turning a blind eye

A known advocate for children’s welfare and education, Gatchalian said his bill would not only help the younger generation focus more on their education but would also curb violence among the youth, a long-held belief associated with high addiction to video games.

Rebutting the claims, Gustilo, citing existing studies on video and online gaming, said there is no substantial proof that playing video games drive violence among youngsters, adding that the government is straying from the real societal issue that contribute to the incitement of brutality among the general population—poverty.

“Is there any data proving that video games are the primary cause of violence? We ask this because, as far as we’re concerned, there are real-life problems that must be addressed by the government, such as poverty. If people earn enough, will they still be stealing? Will they still be choosing a life of crime if they are putting enough food on the table and able to send their children to school? We don’t think so,” he said.

“Hence, what we actually need is the holistic approach of the government to address poverty to be able to resolve crime. Unless there is data proving that video games breed violence, we will remain adamant towards the bill,” Gustilo insisted.

Poverty incidence in the Philippines in 2021 stood at 18.1%, with 19.99 million Filipinos living below the poverty threshold, according to the Philippine Statistics Authority (PSA). The PSA, however, forecasts the figure to drop slightly to 17.1% as the labor market recovers from the impacts of the coronavirus pandemic.

Double-edged sword

Meanwhile, some experts said that Gatchalian’s bill could diversify the Philippine tax collection.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the government may also leverage the bill to create a new source of tax revenue, which could help the Philippines pay off its mammoth PHP5 trillion ($85.42 billion) debt.

Ricafort, however, was quick to point out that doing so may hurt the country’s gaming industry as demand for video games could plummet. Asian Institute of Management economist John Paolo Rivera admitted that this possibility is not far from happening but that its social gains would outweigh any revenue slump and, in the long run, benefit the economy.

“While the objective of this bill is noble, if the social gains from this, such as better focus of students on studies and regulation of violence from video games, are greater than the perceived earnings, then why not,” Rivera said as quoted by the Business World. “Society and the economy will benefit in the long run.”

The local gaming industry, however, is not looking for stricter protocols but rather support from the government that will help cultivate the sector, leveling with key players such as China, the United States, Japan, South Korea, and the United Kingdom.

“Gaming became dynamic precisely because there was little or no state intervention,” said Bienvenido Oplas Jr., founder of the free market think tank Minimal Government Thinkers.

The Philippines is home to over 43 million active gamers as of the end of 2021 and ranks 25th globally in terms of game revenue, with a total of $572 million spent on games in 2019.

The Philippines’ online gaming sector boomed at the height of the pandemic as millions were placed under lockdown and thousands laid off, forcing some to look for means to earn money to ride out the crisis. Axie Infinity, a play-to-earn (P2E) game, was only among a handful of games that thrived during the global health crisis before its popularity slightly dimmed following a hack earlier this year. Others, meanwhile, resort to game streaming on social media to earn as the country’s esports sector gains traction, thanks to groups such as the Blacklist International, who brought the Philippines its second gold medal in the Southeast Asian Games in Hanoi this year, winning against powerhouse Indonesia.

Apart from gaming, non-fungible tokens (NFTs) are also gaining popularity in the Philippines, with an estimated 32% of Filipinos said to have secured such assets, 9.5% planning to buy, and a projected adoption of 41.5%.

Watch: The BSV Global Blockchain Convention panel, Blockchain: Data Power-Ups and NFTs for eSports & Online Games