Philippine Senator accuses Government Service Insurance System of ignoring social cost of gambling investment

Abi Bray

1 October 2025 at 6:35am UTC-4

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Philippine Senator Risa Hontiveros has criticized the Philippines Government Service Insurance System, a state-run pension fund for public sector workers, for its PHP1 billion (US$17.2 million)1 PHP = 0.0172 USD
2025-10-01Powered by CMG CurrenShift investment in the online gambling platform DigiPlus.

Hontiveros told a Senate panel on Tuesday that the Government Service Insurance System failed to consider the documented social costs of online gambling before committing funds. She asked officials if such costs had been considered when assessing risks.

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President and General Manager of Government Service Insurance System, Jose Arnulfo ‘Wick’ Veloso, said the agency viewed DigiPlus as a legal and listed corporation under the Philippine Stock Exchange. He added, “We can see that this qualifies under the three points of our management: profitability, safety, and liquidity. So, we saw that it meets the requirements, and that’s why we invested.”

Hontiveros asked if the Government Service Insurance System was “completely agnostic” to social impacts, highlighting, “You should be able to factor this in more quickly, because in truth, you can act much faster than we can.”

Veloso responded, “The social costs you’re referring to are something we also want to learn how to integrate into our analysis of these kinds of businesses. That is why we would like to seek the wise guidance of this committee and your chamber. If this is the will of the people, then let us amend the law so that we may be properly guided.” Elsewhere in the Philippines, gambling regulator PAGCOR has recently contributed PHP50 million (US$860,000)1 PHP = 0.0172 USD
2025-10-01Powered by CMG CurrenShift towards the country’s National Bureau of Investigation for its work in eradicating illegal gambling.

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The Backstory

Why the crackdown gathered pace

The government’s hardening stance on online gambling did not materialize overnight. It reflects months of pressure from lawmakers, regulators and the finance ministry as digital betting seeped into mainstream apps and public offices. The flashpoint came when public pension money intersected with a sector already under scrutiny. In a Senate hearing, Government Service Insurance System President Jose Arnulfo “Wick” Veloso defended the fund’s PHP1 billion stake in listed operator DigiPlus, stressing profitability, safety and liquidity. Sen. Risa Hontiveros countered that the analysis ignored social harms, pressing whether the fund was “agnostic” to addiction risks. That confrontation placed a public institution at the center of a policy debate over ethics, returns and exposure to a fast-growing but controversial industry, as detailed in coverage of Hontiveros’ push after the GSIS investment in DigiPlus drew fire over social costs.

The policy signal soon turned broader. Finance Secretary Ralph Recto said his department is weighing tougher rules, including higher fees collected by the gambling regulator and restrictions on where state capital can be deployed. Among ideas under review: barring government-owned entities, including the Maharlika fund, from online gambling investments and scrutinizing GSIS’s position in DigiPlus. Recto also floated raising effective rates on operators without new legislation, indicating a faster regulatory track. The deliberations underscore a shift from piecemeal enforcement to structural deterrents, according to the finance department’s evolving plan for stricter online gambling rules.

Workplace walls go up

Policymakers first tried to wall off state workplaces from the industry’s reach. Sen. Joel Villanueva urged the Civil Service Commission to extend its casino ban to online platforms, arguing that digital access in offices undermined integrity and fueled problem gambling. He stressed the CSC could act without new law by updating existing guidelines as online betting proliferated across devices and networks. Those early calls laid groundwork for a swift administrative response. See the push to ban online gambling among civil servants through CSC action.

The Department of the Interior and Local Government then codified a nationwide prohibition. A memorandum barred government employees from engaging in any form of online gambling, citing constitutional and ethical standards and warning of administrative or criminal sanctions. The circular framed digital betting as an equal or greater threat to public trust than casinos, emphasizing the duty to serve with integrity. The order took immediate effect, signaling a prevention-first posture across agencies and local units. Details are in the DILG directive that banned online gambling for government workers.

Cutting off the money pipes

Regulators then targeted payments, the industry’s lifeblood. On Aug. 14 the central bank ordered e-wallets to delink from gambling platforms within 48 hours. Market leaders GCash and Maya complied, but operators pivoted to alternative routes, exploiting e-commerce and messaging apps. Sen. Sherwin Gatchalian pressed the Bangko Sentral ng Pilipinas and PAGCOR to harden the perimeter, warning that intermediaries would keep shifting. He urged the Department of Trade and Industry and the Department of Information and Communications Technology to help police workarounds and protect young users.

The payments squeeze is as much about signaling as enforcement. By forcing transactions into costlier, slower bank rails, policymakers aim to curb impulsive betting and raise friction for unlicensed operators. The approach mirrors tactics used against other high-risk sectors: starve illicit activity of mainstream finance and push it to traceable channels. Gatchalian’s call to sustain pressure is captured in the push for stricter enforcement of the e-wallet delinking order.

The platform fight intensifies

As payments tightened, lawmakers zeroed in on distribution. Social platforms remained saturated with gambling ads even as e-wallets pulled out. When Meta skipped a Senate hearing on the surge of betting promotions, the Games and Amusement Committee moved to issue a show cause order, escalating a standoff with a key gatekeeper of the online ad market. Committee chair Sen. Erwin Tulfo said he intended to ask why ads persisted across Facebook and Instagram despite enforcement efforts, echoing complaints that tech companies profit from local demand while evading accountability.

The dispute highlights a structural enforcement gap. Payment blocks can slow transactions, but discovery and marketing often run through global platforms with their own standards and moderation timelines. Local regulators face limited leverage without cooperation from the firms or legal tools tailored to digital advertising. The Senate’s response suggests lawmakers are prepared to test those limits. Read more on the panel’s action after Meta failed to attend the Senate gambling hearing.

What’s at stake for institutions and investors

The policy arc ties back to stewardship of public funds and the credibility of enforcement. GSIS’s defense of its DigiPlus stake as a compliant, liquid investment put a fiduciary frame on a social issue, forcing a debate over whether legal status and profit screens suffice for public money. Hontiveros urged building social impact into risk models, while Veloso asked for legislative guidance if the mandate must change. That dialogue now intersects with finance officials’ push to limit state exposure to the sector outright, as seen in proposals to bar government entities from online gambling investments and to reprice operator obligations. The clash is documented in scrutiny that questioned the GSIS investment strategy and the finance plan to tighten rules and raise fees.

PAGCOR sits in the middle. The regulator touts contributions to law enforcement, including funding support for the National Bureau of Investigation’s campaign against illegal gambling, even as it faces criticism over rising ads across major platforms. Its enforcement credibility will shape the balance between licensed and gray-market operators, the viability of alliances like the PlaySafe initiative led by DigiPlus, and the government’s ability to capture revenue without fueling harm. Lawmakers are signaling they want faster, coordinated action across regulators, platforms and payments to prevent whack-a-mole tactics from undermining rules.

The stakes extend beyond the gambling sector. How Manila resolves tensions among investor mandates, consumer protection and digital platform governance will set precedents for other regulated industries that live online. A stricter regime with higher costs and limited payment options could squeeze marginal operators and deter investment. A looser one risks addiction, reputational damage and erosion of public trust. The back-and-forth of the past months suggests a path toward firmer limits in public institutions, tighter financial rails and heavier expectations on tech intermediaries — a convergence that will test the reach of Philippine regulators in a borderless digital economy.