VIEW FROM CALUMPANG: Diego Cagahastian

Pagcor, regulator and regulated

Sep 4, 2023, 7:42 AM
Diego S. Cagahastian

Diego S. Cagahastian


It is indeed a weird thing that the Philippine Amusement and Gaming Corp. (Pagcor) which operates the casinos in the country is also the regulatory body that supervises, monitors and ensures that the casinos are following all laws and issuances of the government.

It has been this way since Pagcor and the casinos were created by the first President Ferdinand Marcos.

And yet, Pagcor chair and CEO Alejandro Tengco used this argument at a recent hearing of the House of Representatives Committee on Appropriations in justifying President Bongbong Marcos’ plan to sell Pagcor’s casinos to the highest bidder, before his presidential term ends.

The excuse put forward by the Pagcor chair is that privatization was related to efforts that would enable Pagcor to shed its operator or industry player status, and focus on its role as regulator.

It is true that Pagcor has this “improper” status in the casino industry, that of being the regulator and the regulated entity although we are not sure if Tengco’s claim that it is the only such arrangement in the world.

What is sure is that Bongbong Marcos has made up its mind to privatize Pagcor, a government corporation that is one of its fertile cash cows.

Chairman Al Tengco told the congressmen that the plan to sell Pagcor’s 45 casinos nationwide will be fulfilled in 2025, as President Marcos has already approved it. Tengco added that the government expects some P60 billion to P80 billion proceeds from such sale.

The idea of selling Pagcor casinos has been circulating in government and media circles for some time now. Businessmen who are always in search for good strategic investments are interested, and since there would be competitive bidding, the earlier quoted figures on expected proceeds are deemed conservative. Albay Rep. Joey Salceda, an economist and chair of the House committee on ways and means, estimates that Pagcor should fetch from P120 billion to P128 billion.

Going by the reports to Congress on the business side of Pagcor, the casino operator-and-regulator is earning quite well — it expects to post revenues of P72 billion for the current year 2023, based on the first semester’s P36-billion revenues.

Tengco also said the expected full-year revenue for 2023 would be near Pagcor’s prepandemic revenue of P76 billion in 2019.

This led Cagayan de Oro City Rep. Rufus Rodriguez to wonder: if Pagcor casinos are doing very well, why the heck does Bongbong Marcos want it privatized?

“So why are we going to sell the goose that lays the golden egg when we have good people at the helm of Pagcor,” Rodriguez said. “If we privatize this, then the regularity of income that we receive from Pagcor will be cut short,” he added. “Why give the traffic to them ?”

Congressman Rodriguez sees nothing wrong with this dual status as given by the Pagcor charter, making this gaming institution unique. Instead of getting its annual budget from Congress, Pagcor has become self-sustaining. It remits a huge amount yearly to the national treasury, and even has extra funds for corporate social responsibility activities, such as disaster relief operations, construction of multi-purpose evacuation centers, medical assistance, construction of school buildings, and support for sports.

Rodriguez and others who oppose the sale of Pagcor are worried that these important social protection measures that directly contribute to the alleviation of poverty and disaster mitigation would stop as a consequence of Pagcor’s privatization.

With gaming under purely corporate ownership and management, the social assistance activities that tend to lessen the essential evils associated with gambling would disappear, making this activity a purely business endeavor whose profits are assured by its own rules.

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