Philippines President Ferdinand Marcos Jr. right, shakes hands with House Speaker Martin Romualdez ahead of the State of the Nation Address at the House of Representatives in Quezon City, Philippines, on Monday, July 22, 2024.

 President Ferdinand Marcos Jr. on Monday ordered an immediate ban on widespread and mostly Chinese-run online gaming operations in the Philippines, accusing them of venturing into crimes, including financial scams, human trafficking, torture, kidnappings and murders.

His move to ban the Chinese-run online gambling outfits — estimated to number more than 400 across the Philippines and employing tens of thousands of Chinese and Southeast Asian nationals— came amid an ongoing government crackdown backed by Beijing.

That has led to the shutdown of several sprawling complexes with dozens of buildings, where authorities suspect thousands of Chinese, Vietnamese and other nationals mostly from Southeast Asia have been illegally recruited and forced to work in dismal conditions.

Marcos announced the decision during his state-of-the-nation address, when he also said that the Philippines would press efforts to strengthen its defensive capability by forging security alliances with friendly countries to counter threats to its territorial interests in the South China Sea, adding that his country would only settle disputes through diplomacy.

The Philippines has a complicated relationship with China, including significant trade engagements and cooperation against crimes. But the neighboring Asian countries have also had longstanding disputes in the South China Sea which have grown increasingly hostile since last year.

Relatedly, Philippine senators ordered the arrest of a town mayor in Tarlac province north of Manila who has failed to appear at public hearings where allegations against her were being investigated, including her alleged links to a large online gambling complex near her townhall and suspicions that she fraudulently hid her Chinese nationality to be able to run for a public office reserved only for Filipinos.

The mayor, Alice Guo, has denied any wrongdoing but has been suspended from her post with her financial assets ordered frozen. Philippine senators say the massive online gambling industry has flourished largely due to corruption in regulatory agencies and payoffs to local officials.

“Disguising as legitimate entities, their operations have ventured into illicit areas furthest from gaming such as financial scamming, money laundering, prostitution, human trafficking, kidnapping, brutal torture, even murder,” Marcos said in his address. “The grave abuse and disrespect to our system of laws must stop.”

Marcos ordered the government's gaming agency to wind down the operations of the so-called Philippine offshore gaming operators, or POGOs, by yearend, drawing loud applause from legislators and top officials at the House of Representatives.

He asked labor officials to look for alternative jobs for Filipino workers who would be displaced because of the shutdown.

Setting out his vision for the year ahead, Marcos outlined moves to address a range of issues, including soaring costs of food and electricity, poverty and low wages.

His administration's “bloodless war” on dangerous drugs never aimed at “extermination,” Marcos said in an obvious criticism of his predecessor's brutal anti-drugs crackdown that left thousands of mostly innocent suspects killed.

The International Criminal Court has been investigating the widespread drug killings under former President Rodrigo Duterte as a possible crime against humanity. Duterte has denied authorizing extra-judicial killings.

On Manila's increasingly hostile disputes with Beijing, Marcos stressed the Philippines would not back down but would only resort to peaceful means to resolve any dispute.

"The West Philippine Sea is not only a figment of our imagination. It belongs to us,” Marcos said, using the Philippine name for the stretch of the South China Sea that Manila claims. His remarks drew loud applause and a standing ovation among lawmakers.

"In the face of challenges to our territorial sovereignty, we will assert our rights and interests in the same fair and pacific way that we have always done,” Marcos said. “Proper diplomatic channels and mechanisms under the rules-based international order remain the only acceptable means of settling disputes.”

Philippine efforts, he said, were continuing “to strengthen our defense posture, both through developing self-reliance and through partnerships with like-minded states."

The increasingly hostile confrontations at the Second Thomas Shoal and outlying waters have sparked fears they could escalate into a larger conflict that could involve the United States, the longtime treaty ally of the Philippines.

In the worst confrontation, Chinese forces on motorboats repeatedly rammed and then boarded two Philippine navy boats on June 17 to prevent Filipino personnel from transferring food and other supplies including firearms to the ship outpost in the shallows of the shoal, according to the Philippine government.

The Chinese seized the Philippine navy boats and damaged them with machetes and improvised spears. The violent faceoff wounded several Filipino navy personnel in a chaotic skirmish.

Washington has repeatedly renewed a warning that it’s obligated to defend the Philippines under the 1951 Mutual Defense Treaty if Philippine forces come under attack in the South China Sea and outlying waters.

On Sunday, the Philippine government said it had reached a deal with China in the hope of ending confrontations at the Second Thomas Shoal. The crucial agreement was reached after a series of meetings between Philippine and Chinese diplomats in Manila and exchanges of diplomatic notes that aimed to establish a mutually acceptable arrangement at the shoal without conceding either side’s territorial claims, two Philippine officials told The Associated Press.

Neither side released the text of the agreement, which has been reviewed by top Philippine security officials, according to the two officials. They spoke to the AP on condition of anonymity for lack of authority to discuss details of the accord publicly.

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Philippines cannot yield its South China Sea position, president says

Philippine President Ferdinand Marcos Jr said on Monday his country cannot yield or waver on its position in the South China Sea, but will find ways to de-escalate tensions in the contested waters.

In his State of the Nation Address, Marcos said maritime disputes must be settled through diplomatic channels under the rules-based international order.

"In the face of challenges to our territorial sovereignty, we will assert our rights and interests in the same fair and pacific way that we have always done," Marcos said.

Marcos' remarks, which received a standing ovation from Congress, came after the Philippines said on Sunday it reached a "provisional arrangement" about its resupply missions to the contested Second Thomas Shoal in the South China Sea.

While neither China nor the Philippines provided details of the arrangement, Manila said on Monday it "will not prejudice our respective national positions".

"In our desire to de-escalate the situation in the South China Sea to manage differences in a peaceful manner, we emphasize that the agreement was done in good faith and the Philippines remains ready to implement it," the Philippines' Department of Foreign Affairs said in a statement.

"We urge China to do the same."

The Chinese foreign ministry confirmed a "provisional agreement" with the two sides agreeing to jointly manage maritime differences and de-escalate the situation.

China claims nearly all of the South China Sea, including the Second Thomas Shoal, where the Philippines maintains a rusty naval ship, the Sierra Madre, that it deliberately grounded in 1999 to reinforce its maritime claims.

Manila regularly sends supply missions to sailors stationed at the shoal, turning it into a flashpoint with Beijing. During a mission last month, a Filipino sailor lost a finger after what the Philippine military described as intentional ramming by China Coast Guard vessels against its boats.

China, which has maintained its actions in the waterway were lawful, reiterated its demand on Monday for the Philippines to tow away the grounded warship, and said it would not accept Manila shipping large amounts of building materials to the shoal.

"Between now and when the warship is towed away, should the Philippines need to send living necessities to the personnel living on the warship, China is willing to allow it in a humanitarian spirit if the Philippines informs China in advance and after on-site verification is conducted," the Chinese foreign ministry in a statement.

The Philippine has previously said it was against informing China in advance about its resupply missions, which it maintains are lawful, and said this had not changed under the new deal despite the statement from the Chinese ministry.

"The principles and approaches laid out in the agreement were reached through a series of careful and meticulous consultations between both sides that paved the way for a convergence of ideas without compromising national positions," the Philippines' Department of Foreign Affairs said.

"The spokesperson's statement therefore regarding prior notification and on-site confirmation is inaccurate," it added.

China rejects a 2016 ruling by the Permanent Court of Arbitration in the Hague that Beijing's expansive claims had no basis under international law. The case was brought to the court by the Philippines.

Chinese foreign ministry spokesperson Mao Ning said the temporary arrangement with the Philippines on the delivery of humanitarian supplies "reflects China's goodwill."

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