April 10, 2026
MANILA – A well-coordinated network paved the way for the arrival of the P6.4 billion shabu shipment in 2017. But what sustained and scaled such an operation was a broader system anchored on Philippine offshore gaming operators, or Pogos, fabricated documents and complex financial streams.
This was according to an investigative intelligence brief that Inquirer.net obtained from a source who requested anonymity.
Drawing from financial records, statements and law enforcement reports since 2016, the brief said what appeared to be separate controversies in the six-year presidency of Rodrigo Duterte were interconnected parts of a single operational ecosystem.
Central to this was the rapid expansion of Pogos, which became even more controversial when police raided one in Porac, Pampanga, in 2022.
While Pogos began operating in the Philippines in 2003, their expansion accelerated as the Duterte administration eased internet gambling regulations in a bid to generate more revenue and employ more Filipinos.
In 2017, Duterte issued Executive Order No. 13 in the context of strengthening the fight against illegal gambling and clarifying the authority of government offices to regulate and license online gaming activities.
Almost five years later, he signed Republic Act 11590 (RA 11590), which taxed Pogos in a bid to regulate legal gambling and prohibit illegal operations.
The number of licensed Pogos peaked at almost 300 in 2019 but fell to 17 in 2024. With President Ferdinand Marcos Jr.’s signing of RA 12312, all remaining Pogos are now deemed illegal.
Pogos’ rise with Yang
The brief linked the expansion of Pogos to someone close to Duterte, which it said were eventually exposed as engaged in widespread and systematic torture, illegal detention and severe human rights abuses.
The brief identified him as Michael Yang.
It said Yang and Duterte have been friends since 1999 when, by Duterte’s own account, the Chinese businessman — who later became his economic adviser despite prohibitions — sought his permission to establish a mall in Davao City.
When Duterte became president in 2016, the relationship moved from the local to Malacañang, the brief added.
Two months after Duterte assumed office, Yang’s associate, Lin Weixiong, registered Xionwei Technology Co. Ltd. in Bacoor, Cavite — one of the first Pogos companies accredited by the Philippine Amusement and Gaming Corp. (Pagcor).
By 2019, Yang’s company, Paili Holdings, started constructing Clark Majestic World in the Clark Freeport Zone — a mixed-use development described as “8-bedspace” dormitory units, consistent with the design of accommodations for Pogos workers.
Separately, the Senate’s investigation into the Pharmally procurement scandal established that Yang financed Pharmally Pharmaceutical Corp., which won billions worth of COVID-19 deals with the government.
Billions worth of transactions
Based on Anti-Money Laundering Council (AMLC) records covering March 2003 to August 2021 which the brief cited, transaction reports under the account name Yang Hong Ming Sy had a total value of P16.35 billion.
AMLC flagged specific transactions in 2021 as “anomalous,” including a March 11 transaction involving a P500-million inter-account transfer from Philippine Full Win Group — of which Yang is chairman — deposited to a PBCOM account jointly held by Yang, Jayson Uson, Rose Nono Lin and Lin Weixiong.
Within two weeks, the full P500 million had been “dispersed through a series of P50 million encashments and check clearings.”
AMLC also noted that check-clearing transactions in these accounts were funded by check deposits rather than cash deposits — an irregularity in a CASA account that the brief described as unusual.
The account, and two more, showed no recorded transactions before 2021.
Beyond Michael Yang
The brief said the scheme extended beyond Yang, noting that his brother held a joint account with an incorporator of Hong Sheng Gaming Corp., a Pogos operating inside a compound in Bamban, Tarlac.
The account recorded almost P2 billion in cash flow from 2018 to 2022. One of Yang’s brothers admitted before the Senate that he was a Chinese national who had illegally obtained Filipino identity documents when he arrived in the Philippines in 1998.
The brief said the scale of fake birth certificate issuances to Chinese nationals, as established by National Bureau of Investigation probes from 2024 to 2026, was not attributable to isolated acts of individual corruption.
“The pattern, in its geographic spread and the consistency of its beneficiary profile, suggests a coordinated approach to the Philippine civil registration system,” it said.
NBI’s Davao regional office disclosed in July 2024 that an estimated 1,200 certificates of live birth had been issued to Chinese nationals through the Local Civil Registry of Sta. Cruz, Davao del Sur, from 2016 to 2021 — “the precise years of peak Pogo expansion in the Philippines.”
Regional Director Arcelito Albao noted that some recipients of fake birth certificates in Sta. Cruz were identified among individuals arrested in POGO hub raids in Manila and other regions.
The NBI’s Central Mindanao Regional Office filed charges in March 2026 against civil registrars and facilitators in Pikit and Aleosan, North Cotabato, finding that birth records were “ready-made” — processed without mandatory verification — with Chinese nationals as the primary beneficiaries.
The Philippine Statistics Authority had by then flagged more than 50,000 potentially fraudulent birth records across more than 1,600 registry offices nationwide.
A Philippine birth certificate, once accepted by the PSA, enables access to a passport, a national identification card and — critically — the legal right to acquire real property in the Philippines, a right constitutionally reserved for Filipino citizens and qualified corporations.
The brief said this pathway allowed a network to convert Chinese citizens into apparent Filipino nationals at scale, enabling them to operate facilities, hold corporate positions and, as the land-acquisition evidence suggested, take title to properties. It said civil registry offices provided that mechanism.
Yang’s camp has denied the allegations, saying that “just because a person is connected with a company that somehow has a business dealing with another company under investigation does not make that person’s inclusion in that corporation as illegal.” /dm /asu